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2022 (11) TMI 1041 - AT - Central ExciseLevy of penalty imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 - entire amount of inadmissible credit was deposited by them along with interest prior to issuance of show cause notice - existence of malafide intent or not - HELD THAT - Undisputedly in the present case the entire amount was paid by the appellant prior to issuance of the show cause notice as has been recorded. As per para 25.1 of the impugned order, it is observed that the assessee/appellant has deposited an amount of Rs.76,88,567/- against the confirmed demand of Rs.73,56,672/- confirmed by the impugned order. This amount was apportioned by the Commissioner in the impugned order. They have also deposited the interest of Rs.12,13,947/-. All the amounts were deposited prior to issuance of show cause notice. Appellant has already paid the credit even prior to the issuance of the show cause notice. In an issue which is just with regard to quantification of the cenvat credit reversal, no malafide intention can be attributed to the appellant - Commissioner has himself concluded that in the same situation the appellant was acting under a bonafide belief and no malafide intention could have been attributable to them for imposition of penalty under Section 11AC of the Central Excise Act. Then what the Commissioner has held in respect of these demands cannot be sustained. There are no justification in imposition of penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act - appeal allowed.
Issues Involved:
1. Early hearing application 2. Imposition of penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 Issue-wise Detailed Analysis: 1. Early Hearing Application: The applicant filed a miscellaneous application for early hearing, citing that the issue was covered by previous judgments and warranted expedited consideration. The learned counsel for the appellant supported this request, while the Authorized Representative for the Revenue did not object but noted the delay in filing the early hearing application. The Tribunal found sufficient reasons to allow the early hearing application, considering the narrow scope of the issue, which pertained only to the penalty. 2. Imposition of Penalty under Rule 15(2) of the Cenvat Credit Rules, 2004: The appeal was directed against an order by the Commissioner of Central Excise, Pune-II, which confirmed a demand and imposed a penalty of Rs.73,56,672/- under Rule 15(2) of the Cenvat Credit Rules, 2004, read with Section 11AC of the Central Excise Act, 1944. The appellant had deposited the entire amount of inadmissible credit along with interest before the issuance of the show cause notice. The appellant argued that since the entire amount was paid before the show cause notice, the benefit of sub-section (2) of Section 11A should apply, negating the need for a penalty. The appellant contended that there was no fraud or suppression justifying the penalty. The learned AR reiterated the findings of the impugned order. The Tribunal examined the impugned order and submissions. It was noted that the Commissioner had observed that the appellant's failure to reverse the cenvat credit was detected by Anti-Evasion Officers, justifying the invocation of the extended period for demand. However, the Tribunal found that the entire amount was paid before the show cause notice, indicating no malafide intention. The Tribunal referred to its previous order dated 06.01.2012, which highlighted that the appellant had paid the ineligible credit and interest before the show cause notice. The Tribunal also noted that in similar circumstances, the Commissioner had refrained from imposing penalties, recognizing the appellant's bonafide belief and lack of malafide intention. The Tribunal concluded that there was no justification for imposing a penalty under Rule 15(2) of the Cenvat Credit Rules, 2004, read with Section 11AC of the Central Excise Act. Consequently, the penalty imposed in para 25.3 of the impugned order was set aside, while the rest of the order remained unmodified. Conclusion: The Tribunal allowed the early hearing application and, upon review, set aside the penalty imposed under Rule 15(2) of the Cenvat Credit Rules, 2004, while maintaining the rest of the impugned order. The appeal was allowed to the extent of the penalty issue.
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