2023 (6) TMI 1079 - HC - Central Excise

Deletion of penalty - failure to appreciate Rule 15(1) of CCR, 2004 which clearly states that it is a mandatory penalty thereunder to be imposed whenever CENVAT Credit is availed wrongly - requirement of any malafide or mens-rea required to be proved for invoking the said Rule or not - HELD THAT - Reliance placed in the decision of a Larger Bench of the Tribunal in the case of M/S. SOUTH INDIAN BANK VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX-CALICUT 2020 (6) TMI 278 - CESTAT BANGALORE . In such order, this Court observed that in view of the decision rendered by the Larger Bench of the Tribunal, the order as impugned in the appeals filed by the assessees, (being the very same order as impugned in the present proceedings) could not be sustained and the same was required to be set aside, with a further direction that the appeals of the assessees on remand be decided afresh in the light of the decision rendered by the larger bench of the Tribunal in South Indian Bank. It is not in dispute that on the appeals filed by the respondents/assessees, similar orders were passed by a coordinate Bench of this Court. The principal order subject matter of challenge in the present proceedings itself is set aside in the assessee s appeals and that such appeals are remanded to the Tribunal and are subject matter of reconsideration before the Tribunal - Appeal disposed off.

Summary

Issues involved:
The judgment addresses the common question of law regarding the deletion of penalties imposed by the lower authority for wrongly availing CENVAT Credit without the need to prove malafide or mens-rea, as per Rule 15(1) of CCR, 2004.

Details of the judgment:

1. The appeals were filed challenging the penalties imposed by the lower authority for wrongly availing CENVAT Credit. The Tribunal had deleted these penalties, leading to the current question of law. The High Court noted that similar appeals had been allowed previously based on the decision of a Larger Bench of the Tribunal in another case.

2. The High Court mentioned that the appeals were remanded to the Tribunal for reconsideration in light of the decision by the Larger Bench. As a result, the principal order under challenge was set aside, and the appeals were to be decided afresh by the Tribunal. The Court observed that all issues, including the penalty issue, could be raised before the Tribunal.

3. Given the remand of the appeals to the Tribunal, the High Court concluded that there was no need to adjudicate on the question of law raised by the appellants at that stage. The judgment disposed of the appeals without any costs and permitted the parties to request early adjudication of the pending proceedings before the Tribunal.

This summary highlights the key aspects of the judgment, including the context of the appeals, the remand to the Tribunal, and the decision not to adjudicate on the question of law raised by the appellants at that stage.