2018 (6) TMI 1249 - AT - Central Excise

Reversal of CENVAT credit - writing off of raw materials/packing materials - case of Revenue is that admittedly the order of the Assistant Commissioner, in the operative part, has nowhere specified dropping of the demand in respect of reversal of Cenvat credit in respect of written off of raw materials and packing list - Held that - The adjudicating authority, may verify the figures again. If according to the ld. Advocate, the figures are correct, the adjudicating authority would pick up the same figures again and there is no harm in verification of the same - It is also a fact that in the operative part of the order, the original adjudicating authority has not referred to dropping of demand. In such a scenario, I deem it fit to uphold the impugned order of Commissioner (Appeals) vide which he has remanded the matter for fresh verification of the figures. Penalty - Held that - It is not a case of any mala fide and the said demand stands arisen on account of calculation errors. In such a scenario, imposition of penalty upon the appellant is not justified. Appeal disposed off.

Summary

Issues: Disputed issue of raw materials/packing materials written off by the appellant, verification of figures by the adjudicating authority, demand confirmation of ?14,359/-, imposition of penalty, remand by Commissioner (Appeals), challenge before the Tribunal.

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Member (Judicial) Ms. Archana Wadhwa, pertains to a case involving the manufacture and export of pharmaceutical products by the appellants. The primary issue in question revolved around the raw materials and packing materials written off by the appellant, leading to the reversal of Cenvat credit. The original adjudicating authority initially dropped the demand related to this issue, citing that the appropriate Cenvat credit had been reversed. However, a demand of approximately ?14,359/- was confirmed along with the imposition of a penalty.

The matter was subsequently appealed by both the Revenue and the assessee before the Commissioner (Appeals). The Commissioner (Appeals) noted discrepancies in the original adjudicating authority's order, highlighting the lack of verification and quantification regarding the reversal of Cenvat credit. Consequently, the Commissioner remanded the case for re-verification on this aspect. While the duty confirmation of ?14,359/- along with the penalty was upheld for the assessee, the appeal was challenged before the Tribunal.

During the Tribunal proceedings, the appellant's advocate argued that the figures were correctly adopted from the report by the jurisdictional Central Excise Superintendent by the Assistant Commissioner. The appellant acknowledged the underpayment of ?14,359/- but contended that the penalty should be set aside due to a mere calculation error without any intent to evade duty. On the other hand, the Revenue's representative emphasized the need for re-verification of figures due to the lack of specificity in the original order.

After considering the arguments from both sides, the Tribunal agreed to uphold the Commissioner (Appeals)'s decision to remand the matter for fresh verification of the figures. Regarding the demand of ?14,359/-, the Tribunal recognized the inadvertent calculation error by the appellant and deemed the penalty imposition unjustified, thereby setting it aside. Consequently, the Tribunal disposed of both appeals in the aforementioned manner, ensuring the demand confirmation while relieving the appellant from the penalty burden.