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2018 (10) TMI 1460 - AT - Central ExciseCENVAT Credit - capital goods - manufacture of steel fabricated frames and stainless steel fabrication - case of appellant is that SCN has been issued without proper investigation and the allegations are based on mere assumptions and presumptions - principles of natural justice - Held that - It is a fact that both the Unit l and Unit ll belong to the appellant. Further, the appellants have transferred the capital asset from their Unit l to Unit ll by issuing an Invoice No. 456 dated 19.08.2011 but both the authorities have considered that it is a sale from the appellant to its another unit. The Commissioner (Appeals) has not considered the grounds taken by the appellant regarding the limitation as well as revenue-neutral situation as pleaded by the appellant and has merely reiterated and accepted the Order-in-Original - also the decisions relied upon by the appellant regarding the bona fide and honest belief that they are entitled to cenvat credit and there is no intention to evade the duty, both the authorities have not considered these decisions. This case needs to be remanded back to the original authority for proper adjudication after considering all the grounds taken by the appellant - appeal allowed by way of remand.
Issues:
1. Duty short paid by the appellant under Section 11A(4) & (5) of the Act and irregular credit availed by Unit I under Rule 14 of the Cenvat Credit Rules, 2004. 2. Penalty imposition against the appellant and a partner for duty short paid and irregular credit availed. 3. Appellant's challenge to the impugned order citing lack of proper appreciation of facts and law, non-speaking order, and failure to consider defense. 4. Invocation of extended period of limitation by the Revenue. 5. Imposition of penalty on the firm and partner separately. Analysis: 1. Duty Short Paid and Irregular Credit Availed: The appellant was found to have availed cenvat credit on a laser cutting machine, leading to a duty shortfall of ?21,40,464. The machine was transferred to Unit II after being sold, but credit was availed at Unit I even after the sale. The investigation revealed contravention of Cenvat Credit Rules, 2004 and Central Excise Rules, 2002. Statements confirmed the duty shortfall and ineligible credit availed. 2. Penalty Imposition: The Additional Commissioner confirmed demands for central excise duty, irregular cenvat credit, and penalties against the appellant and a partner. The appellant challenged the penalties, arguing that the firm and partner should not be penalized separately, citing legal precedents. 3. Challenge to Impugned Order: The appellant contested the impugned order, alleging lack of proper appreciation of facts and law. They claimed that the authorities did not consider their defense, failed to provide relied-upon documents, and issued the show-cause notice without thorough investigation. The appellant highlighted a revenue-neutral situation, technical lapses rectified by them, and the common ownership of both units. 4. Invocation of Extended Limitation Period: The appellant questioned the Revenue's invocation of the extended limitation period, citing their voluntary payment and communication regarding the lapse. Legal precedents were relied upon to support their argument against the extended period. 5. Penalty Imposition on Firm and Partner: The appellant argued against the imposition of penalties on both the firm and the partner separately, emphasizing that they are not distinct legal entities. Legal decisions were cited to support the contention that penalizing both the firm and the partner constitutes double penalization. The Tribunal found merit in the appellant's arguments, noting technical lapses rectified by them, common ownership of units, and the need for proper adjudication considering all grounds raised. The impugned order was set aside, and the matter remanded for a fresh adjudication, emphasizing adherence to natural justice principles and consideration of all evidence and legal precedents. This detailed analysis covers the issues raised in the legal judgment, providing a comprehensive understanding of the case and the Tribunal's decision.
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