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2015 (7) TMI 496 - AT - Central ExciseIrregular availment of capital goods credit availed on the CVD paid on the imported capital goods cleared under EPCG licence - Held that - Appellant s case is squarely covered under Section 11A (2B) which stipulates not only voluntary payment of duty by the assessee but also any amount pointed out by the officers. In the instant case, it is evident that internal audit was conducted and the officers informed the appellant the irregular availment and directed the appellant to comply the audit para and the appellant complied immediately. I hold that there is no suppression of facts by the appellants with deliberate intention to evade duty. By respectfully following the decisions cited (2003 (9) TMI 625 - CESTAT, BANGALORE), 2011 (1) TMI 746 - KARNATAKA HIGH COURT and 2010 (8) TMI 765 - CESTAT, NEW DELHI while upholding appropriation of demand and interest, I set aside Section 11AC penalty in respect of appellant M/s.Aswin Textiles Pvt. Ltd. - As regards the co-noticee, original penalty of ₹ 48 lakhs imposed by the adjudicating authority was reduced to ₹ 1 lakh by the LAA. After considering the merits of the case, I do not find any merit for full waiver of penalty. Accordingly the reduced penalty of ₹ 1 lakh imposed on the co-noticee is upheld - Decided partly in favour of assessee.
Issues:
1. Change of appellant name in cause title. 2. Common issue in appeals regarding irregular availment of capital goods credit. 3. Imposition of penalty under Section 11AC and Rule 26 of CER. Issue 1: Change of Appellant Name The appellant sought to change the name in the cause title from M/s. Aswin Textiles Pvt. Ltd. to R.S. Mills Pvt. Ltd. The change was allowed based on the certificate from the Registrar of Companies, and the matter was disposed of. Issue 2: Irregular Availment of Capital Goods Credit The case involved the irregular availment of capital goods credit on imported capital goods cleared under EPCG license without paying CVD. The appellant imported machines under concessional rate but availed credit where CVD was exempted. The adjudicating authority confirmed the demand, imposed penalties, and the Commissioner (Appeals) upheld the demand but reduced the penalty. The appellant argued that it was a genuine mistake due to a communication gap between the head office and the factory. The appellant promptly reversed the credit and paid interest upon detection. The appellant contended that penalty imposition was not warranted as they complied with audit findings voluntarily. Issue 3: Imposition of Penalty The issue revolved around the imposition of equal penalty on the appellant and co-noticee for irregular credit availment. The appellant argued that there was no deliberate intention to evade duty and cited relevant case laws. The Tribunal found that the appellant promptly complied with audit objections and there was no suppression of facts to evade duty. The penalty under Section 11AC was set aside for the appellant. However, the reduced penalty on the co-noticee was upheld as there was no merit for full waiver. The appeals were partly allowed and dismissed accordingly. This judgment addressed the issues of changing the appellant name in the cause title, irregular availment of capital goods credit, and the imposition of penalties under Section 11AC and Rule 26 of CER. The Tribunal allowed the name change, considered the circumstances of the capital goods credit irregularity, and ultimately set aside the penalty for the appellant while upholding a reduced penalty for the co-noticee. The decision highlighted the importance of compliance with audit findings and the absence of deliberate intent to evade duty in determining penalty imposition.
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