2015 (10) TMI 1190 - AT - Central Excise

Denial of CENVAT Credit - Imposition of penalty - Held that - Commissioner (Appeals) observed that there was no challenge to the wrong availment of the CENVAT credit by the appellant. Therefore, the grounds advanced by the appellant in their appeal become an additional submission. It is further observed that the appellant have failed to satisfy the authority as to why the additional submissions should be entertained, as required under Rule 5 of the Central Excise (Appeal) Rules, 2001. Learned Advocate submits that they have taken the issue of non-utilisation of CENVAT credit before the adjudicating authority. In my considered view, the Commissioner (Appeals) should have examined the additional grounds in the memorandum of appeal placed before him, in the interest of justice. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
- Denial of CENVAT credit
- Interest and penalty imposition
- Contesting denial of credit
- Employee's involvement in penalty imposition

Analysis:

The appellants, engaged in manufacturing excisable goods, faced show cause notices proposing denial of CENVAT credit, interest, and penalty. In one notice, the demand of duty was not contested, but credit non-utilization was argued. In the other notice, denial of specific credits, interest, and penalty were contested, with the argument that the amounts were not utilized and the penalty on an employee was unwarranted. The Revenue's representative reiterated the Commissioner (Appeals)' findings.

Upon review, the Commissioner (Appeals) noted no challenge to the wrong CENVAT credit availment by the appellant. The appellant's additional submissions were considered as they failed to satisfy the authority on why these should be entertained as per Rule 5 of the Central Excise (Appeal) Rules, 2001. The appellant argued that the issue of non-utilization was raised before the adjudicating authority, suggesting the Commissioner (Appeals) should have examined these additional grounds in the interest of justice.

Consequently, the appeals were remanded to the Commissioner (Appeals) for a fresh decision, emphasizing the consideration of all appellant submissions. The Commissioner (Appeals) was directed to provide a proper opportunity for a hearing before issuing a new order. Ultimately, all appeals were allowed through remand, indicating a favorable outcome for the appellants.