2022 (10) TMI 190 - AT - Central Excise

Reversal of CENVAT Credit - input services - service of outward transportation availed from their factory/depot to the buyer s premises - penalty - HELD THAT - The demand of reversal of cenvat credit on outward transportation is set aside. Cenvat credit in respect of which the appellant could not produce the evidence of payment of duty in the shape of invoice - HELD THAT - The demand was confirmed by the tribunal and the matter was remanded solely for the purpose of quantification. The appellant in this appeal has not challenged the quantification in so far as amount of Rs. 2,72,072/- is concerned, the said demand is confirmed. Penalty - HELD THAT - It is seen that Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11(AC) of the Central Excise Act, 1944 prescribes the penalty for availment of inadmissible or wrongful credit. In this case, the appellant admittedly taken credit without having the documents consequently, the penalty imposed under Rule 15 is revised from Rs.23,52,037/- to Rs.2,72,072/-. Appeal allowed in part.

Summary

Issues:
1. Entitlement to cenvat credit on outward transportation.
2. Entitlement to cenvat credit on transactions without supporting documents.
3. Imposition of penalty under Rule 15 of the Cenvat Credit Rules.

Entitlement to Cenvat Credit on Outward Transportation:
The appeal was filed against the demand for reversal of cenvat credit by M/s. Sanghi Industries Limited. The tribunal had previously decided two issues, one being the entitlement to cenvat credit on outward transportation. The tribunal, following the decision of a Larger Bench, allowed the appeal and set aside the demand for reversal of cenvat credit on outward transportation. The matter was challenged in higher courts but ultimately upheld. However, the Commissioner later confirmed the demand for reversal of service tax on outward transportation from the depot to the buyer's premises. The tribunal, in a subsequent order, confirmed the demand against the appellant for not producing the necessary documents. The demand was remanded for quantification, and the tribunal set aside the demand for reversal of cenvat credit on outward transportation.

Entitlement to Cenvat Credit on Transactions without Supporting Documents:
The second issue revolved around the entitlement to cenvat credit on transactions for which the appellant did not possess supporting invoices or documents. The tribunal confirmed the demand against the appellant for not providing the necessary documents. The matter was remanded for quantification, and the appellant did not challenge the quantification concerning a specific amount. The penalty under Rule 15 of the Cenvat Credit Rules was imposed for wrongly taking credit without proper documents, which was revised to a lower amount.

Imposition of Penalty under Rule 15 of the Cenvat Credit Rules:
The penalty under Rule 15 of the Cenvat Credit Rules was imposed due to the appellant taking credit without the required documents. The penalty amount was revised to a lower sum based on the circumstances. The appeal was partly allowed in favor of the appellant, considering the above terms.

In conclusion, the tribunal's decision addressed the issues of entitlement to cenvat credit on outward transportation, entitlement to credit on transactions without supporting documents, and the imposition of penalties under Rule 15 of the Cenvat Credit Rules. The tribunal set aside the demand for reversal of cenvat credit on outward transportation and confirmed the demand for transactions without supporting documents, albeit remanding it for quantification. The penalty imposed was revised to a lower amount based on the appellant's circumstances.