2018 (3) TMI 610 - AT - Central Excise

Reversal of CENVAT credit - capital goods were not received back by them within the period of 180 days - Held that - the appellant is not contesting the demand of duty, interest and imposition of penalty. The demand of duty is of ₹ 2,59,050/- and as such I agree with the ld. Advocate that the interest payable by them would be on the said amount only. Similarly, for penalty amount, the same would be imposable equivalent to the duty confirmed against them which is again ₹ 2,59,050/- - appeal disposed off.

Summary

Issues:
1. Reversal of Cenvat credit on capital goods not received back within 180 days.
2. Liability to reverse remaining credit upon sale of capital goods.
3. Confirmation of interest and penalty by original adjudicating authority.
4. Appeal against penalty and interest imposition.

Issue 1: Reversal of Cenvat credit on capital goods not received back within 180 days
The appellants, engaged in manufacturing, availed Cenvat credit on capital goods but cleared them to a job worker unit without reversing the credit. As the goods were not returned within 180 days, the appellants were held liable to reverse the credit.

Issue 2: Liability to reverse remaining credit upon sale of capital goods
Upon purchasing the job worker unit, the appellants sold the capital goods and paid duty on the transaction value. Revenue contended that the remaining credit should also be reversed, leading to proceedings and confirmation of the amount by the adjudicating authority.

Issue 3: Confirmation of interest and penalty by original adjudicating authority
The original adjudicating authority confirmed the interest and imposed a penalty of the total credit availed. The Commissioner (Appeals) upheld this decision, resulting in the appellant appealing against the interest calculation and penalty imposition.

Issue 4: Appeal against penalty and interest imposition
The appellant sought to deposit the confirmed demand but requested interest to be calculated only on the confirmed amount. They also argued for a reduction in the penalty to match the confirmed demand. The Tribunal agreed with the appellant, directing the authorities to calculate interest and reduce the penalty to the confirmed demand amount.

In conclusion, the Tribunal disposed of the appeal by confirming the demand of duty, adjusting interest calculation, and reducing the penalty to match the confirmed demand amount, thereby providing relief to the appellant in terms of interest and penalty imposition.