2010 (1) TMI 332 - AT - Central Excise

Penalty- The penalty was imposed on the ground that the respondent had deliberately chosen not to reverse Cenvat credit of Rs. 73,470/- on capital goods which were sent to a job worker, even though the job-worked goods were not received in their factory within the prescribed period of 180 days and on the further ground that the factum of non-reversal of the credit was suppressed by them. Commissioner (Appeals) left the major part of penalty. Held that- penalty of Rs. 5,000/- is liable to be maintained, as against the appellant s prayer for imposition of penalty equal to duty (Rs. 5,011/-) on the party. I am of the view that the prayer for enhancement of penalty by Rs. 11/- is not worth considering.

Summary

Issues:
- Restoration of penalty imposed on the respondent by the original authority under Rule 13 of the Cenvat Credit Rules, 2002 read with Section 11AC of the Central Excise Act.
- Imposition of penalty on the respondent for not reversing Cenvat credit on capital goods sent to a job worker and for suppressing facts regarding non-inclusion of amortised value of dies in the manufacture of goods.

Analysis:
1. The appeal filed by the department sought restoration of the penalty imposed on the respondent by the original authority. The penalty was imposed under Rule 13 of the Cenvat Credit Rules, 2002 read with Section 11AC of the Central Excise Act. The original authority imposed a total penalty of Rs. 78,481 on the respondent for various reasons, including the non-reversal of Cenvat credit on capital goods sent to a job worker and the suppression of facts related to the amortised value of dies used in manufacturing goods. The appellate authority vacated the penalty of Rs. 73,470 related to the non-reversal of Cenvat credit as it found that nothing was suppressed by the respondent regarding this issue. This finding was not challenged in the present appeal, leading to the decision of the Commissioner (Appeals) being upheld.

2. Regarding the penalty of Rs. 5,011 imposed on the respondent for suppressing facts about the non-inclusion of the amortised value of dies in the manufacture of goods, the Commissioner (Appeals) noted that the differential duty amount had not been contested by the assessee and had been paid before the show-cause notice. The Commissioner (Appeals) maintained a penalty of Rs. 5,000 against the respondent, which was not appealed by the assessee. Therefore, the penalty of Rs. 5,000 was upheld, rejecting the appellant's plea for an increased penalty equal to the duty amount of Rs. 5,011. The judgment concluded by sustaining the impugned order and dismissing the appeal.

In summary, the appellate tribunal upheld the decision of the Commissioner (Appeals) regarding the penalties imposed on the respondent, with one penalty being vacated and the other penalty being maintained based on the facts and submissions presented during the proceedings.