2019 (3) TMI 1278 - AT - Central Excise

CENVAT Credit - duty paying documents - some of the invoices which are not valid document - credit on imported coal availed for which no invoices / Bill of Entry was produced - Held that - The denial of CENVAT credit on TMT bars is not justified because the said items were used in the factory in relation to the manufacture of final products and the Revenue has failed to bring any material on record to show that it has been used for any civil construction. Further this credit pertains to the period prior to 01/04/2011 when such credit was admissible - credit allowed. CENVAT Credit - Clean energy cess - Held that - In view of the decision of the Tribunal in the case of Ramco Cements Ltd. 2018 (10) TMI 10 - CESTAT BANGALORE , the appellant is entitled to CENVAT credit on Clean Energy Cess which is paid as duty of excise - further, credit of BCD and Customs cess was availed only by mistake and not with intention to evade payment of duty. Therefore to that extent, the appellants are not liable for payment of penalty. Demand of Interest - Held that - In view of the decision of Karnataka High Court in the case of Bill Forge Pvt. Ltd. 2011 (4) TMI 969 - KARNATAKA HIGH COURT , appellant is not liable to pay interest, if he has availed the credit and not utilized the same - But in the present case, the appellant has reversed the CENVAT credit irregularly availed and has also paid ₹ 5 lakhs in cash. These facts need to be verified by the original authority as to whether the appellant had got sufficient balance in their CENVAT account - matter on remand. Appeal allowed in part and part matter on remand.

Summary

Issues:
Appeal against Commissioner (Appeals) order upholding Order-in-Original disallowing CENVAT credit and imposing penalty.

Analysis:
1. Facts and Observations:
- Appellants availed CENVAT credit on inputs/capital goods but faced discrepancies during audit.
- Show-cause notice issued for demanding ineligible CENVAT credit.
- Order-in-Original disallowed credit, imposed penalty, and demanded interest.
- Appellant's appeal before Commissioner (Appeals) rejected.

2. Appellant's Arguments:
- Appellant's consultant argued lack of sustainability in the impugned order.
- Claimed credit availed in good faith, even if documents were missing.
- Asserted credit on steel/TMT bars was for maintenance, not construction.
- Cited precedents supporting eligibility for Clean Energy Cess credit.
- Contended no mala fide intent for availing BCD and Customs cess credit.

3. Revenue's Defense:
- AR defended order, stating appellant liable for interest/penalty.
- Alleged suppression of facts by appellant to evade duty.

4. Tribunal's Decision:
- Tribunal found denial of TMT bars credit unjustified, allowed credit.
- Held appellant entitled to Clean Energy Cess credit based on precedents.
- Noted BCD and Customs cess credit availed by mistake, no penalty warranted.
- Regarding interest, remanded matter to original authority for verification.

5. Conclusion:
- Appellants entitled to TMT bars and Clean Energy Cess credits.
- Not liable for penalty due to lack of intent to evade duty.
- Original authority to quantify interest amount, remand for further proceedings.

In summary, the appeal was allowed by way of remand for the quantification of interest amount and penalty, with the appellant being granted CENVAT credits for TMT bars and Clean Energy Cess, and not held liable for penalty under Rule 15(2) due to the absence of intent to evade payment of duty.