2021 (2) TMI 1133 - AT - Central Excise

Levy of penalty u/r 15(1) of Cenvat Credit Rules, 2004 - suppression on the part of the assessee or not - allegation is that assessee have not come out with full and proper details before the Revenue authority at first instance - input - MT HDT Feed - HELD THAT - No case of imposition of penalty under Rule 15(2) of Cenvat Credit Rules, 2004 is made out. Further cogent explanation given by the assessee have not been found wrong in the impugned adjudication order. It has been held by the Hon ble Bombay High Court in Commissioner of Central Excise, Pune-II Vs. Ajinkya Enterprises 2012 (7) TMI 141 - BOMBAY HIGH COURT , that payment of duty on output/finished goods amounts to reversal of Cenvat credit taken on inputs. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Imposition of penalty under Rule 15(2) of Cenvat Credit Rules, 2004.
2. Dispute regarding input credit for a specific period.
3. Classification of input MT HDT Feed for manufacturing HSD.
4. Applicability of Essential Commodities Act, 1955 in the case.
5. Interpretation of specifications for HDP Feed and HSD.
6. Admissibility of Cenvat credit and penalty imposition.

Analysis:
The judgment pertains to an appeal regarding the imposition of a penalty under Rule 15(2) of Cenvat Credit Rules, 2004 by the Revenue. The dispute primarily revolves around the input credit availed by the Respondent Assessee for the period from 01.04.2009 to 31.03.2010 related to the input MT HDT Feed received from another entity for manufacturing HSD. The Revenue contended that a higher penalty should have been imposed due to alleged suppression of details by the assessee initially. However, the tribunal found that the defense put forth by the assessee regarding the classification of HDP Feed and HSD, as well as the applicability of the Essential Commodities Act, was valid.

Upon examining the contentions of both parties, the tribunal concluded that there was no basis for imposing a penalty under Rule 15(2) of the Cenvat Credit Rules, 2004. The tribunal noted that the explanation provided by the assessee was cogent and in line with legal precedents, including a ruling by the Hon'ble Bombay High Court. The tribunal highlighted that payment of duty on finished goods results in the reversal of Cenvat credit taken on inputs, supporting the assessee's position. Consequently, the appeal by the Revenue was dismissed, and the penalty was not upheld.

In summary, the tribunal's decision was based on a thorough analysis of the facts and legal arguments presented by both parties. The judgment emphasized the importance of compliance with relevant laws and specifications in determining the admissibility of Cenvat credit and the imposition of penalties. The ruling underscored the need for a clear and consistent application of legal principles in adjudicating disputes related to tax matters in the excise context.