2018 (1) TMI 407 - AT - Central Excise

Rectification of mistake - Rule 15 (1) of CCR, 2004 - Held that - appeal was rejected observing that the demand was issued for the normal period of limitation and wherever extended period of limitation was invoked, the recovery of interest was set-aside - the penalty was imposed under Rule 15 (1) of Cenvat credit Rules,2004 therefore, the ingredients of suppression, mis-declaration etc., is not relevant for imposition of penalty. Re-consideration of the quantum of penalty, at this stage, would result in review of the order of this Tribunal dated 31.03.2017 a jurisdiction not conferred on this Tribunal - ROM application dismissed.

Summary

Issues: Rectification of mistake in the order, imposition of penalty under Rule 15 (1) of CCR 2004, consideration of extended period of limitation in appeals.

Rectification of mistake in the order:
The judgment pertains to an application seeking rectification of a mistake claimed to be apparent in an order dated 31.03.2017. The Tribunal had rejected an appeal filed by the applicant, stating that it was within the normal period of limitation, making interest recoverable. The appellant's advocate argued that the Tribunal had allowed appeals where the extended period was invoked due to the lack of certainty in the law during the relevant period. The advocate contended that the penalty imposed under Rule 15 (1) of CCR 2004 should not apply as there was no intention to avail inadmissible credit, but it was taken in good faith belief of its admissibility.

Imposition of penalty under Rule 15 (1) of CCR 2004:
The Revenue's representative argued that the Tribunal had previously set aside demands for the extended period of limitation when there was confusion in the law, as there could be no mis-declaration or suppression of facts. Citing a judgment of the Delhi High Court, the appeals filed by the appellant were allowed, limiting the demand to the normal period. The Revenue contended that the rejection of the applicant's appeal was due to the demand being issued within the normal period of limitation. The applicant's request to waive the penalty was deemed unacceptable as the penalty was imposed under Rule 15 (1) and not Rule 15 (2) of CCR 2004. Waiving the penalty at this stage would amount to a review of the order, which the Tribunal was not empowered to do as per a Supreme Court judgment.

Consideration of extended period of limitation in appeals:
The Tribunal, in its analysis, found merit in the Revenue's argument that the appeal was rejected because the demand fell within the normal period of limitation. It was noted that where the extended period of limitation was invoked, the recovery of interest was set aside. The penalty in the present case was imposed under Rule 15 (1) of Cenvat Credit Rules, 2004, making the elements of suppression or mis-declaration irrelevant for penalty imposition. Reconsidering the penalty at this stage would amount to a review of the Tribunal's order dated 31.03.2017, a jurisdiction not vested with the Tribunal as per a Supreme Court judgment. Consequently, the application for rectification of mistake was dismissed.

This detailed judgment analysis addresses the issues of rectification of mistake in the order, imposition of penalty under Rule 15 (1) of CCR 2004, and the consideration of the extended period of limitation in appeals, providing a comprehensive understanding of the legal reasoning and decisions made by the Tribunal in this case.