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2019 (4) TMI 117 - AT - Central ExciseImposition of penalty u/r 15(1) and (15(2) of the CCR read with Section 11AC of the Central Excise Act - irregular availment of CENVAT Credit, immediately reversed on being pointed out - Held that - As soon as the Audit pointed out the wrong availment of CENVAT credit by the appellant, the appellant reversed the same along with interest before the issuance of show-cause notice - the appellant vide their letter dt. 13/03/2012 informed the Department that they have taken the credit by mistake and there was no intention to avail excess credit. The Tribunal in various decisions has held that once the duty is paid along with interest before the issuance of the show-cause notice and there is no suppression of fact with intent to evade payment of duty, then the assessee is not liable to pay penalty - reliance placed in the case of CC, Mangalore Vs. Jindal Vijayanagar Steel Ltd. 2011 (8) TMI 1261 - KARNATAKA HIGH COURT . Penalty do not sustain - appeal allowed - decided in favor of appellant.
Issues:
1. Imposition of penalty under Rule 15(2) of the CCRs read with Section 11AC of the Central Excise Act. 2. Applicability of Section 11A(1)(b) read with Section 11A(2) of the Central Excise Act. 3. Whether there was suppression of fact with intent to evade payment of duty. 4. Invocation of the extended period of limitation. Analysis: Issue 1: The appellant availed CENVAT credit on fabricated steel buildings, which was later found to be ineligible. The Department issued a show-cause notice proposing penalty under Rule 15(2) of the CCRs read with Section 11AC. The original authority confirmed the demand and imposed the penalty. The appellant contended that the penalty imposition was not sustainable as the credit along with interest was paid before the show-cause notice. Citing judicial precedents, the appellant argued against the penalty imposition. Issue 2: The appellant claimed that the case falls under Section 11A(1)(b) read with Section 11A(2) of the Central Excise Act, stating that the duty along with interest was paid prior to the issuance of the show-cause notice. The appellant emphasized that there was no intention to avail excess credit and no suppression of facts with intent to evade payment of duty. The learned counsel relied on specific decisions to support this argument. Issue 3: The Department argued that the appellant knowingly availed CENVAT credit on pre-fabricated steel building, despite being aware of its ineligibility. The Department contended that the appellant was not entitled to the benefit of Section 11A(1)(b) read with Section 11A(2) of the Central Excise Act. The Department supported its stance with relevant judicial decisions. Issue 4: The appellant asserted that there was no suppression of fact with intent to evade payment of duty, as all relevant information was available in the records. The appellant argued against the invocation of the extended period of limitation. The Tribunal analyzed the submissions of both parties and found that the appellant had promptly rectified the error upon detection by the Audit, paid the duty along with interest, and informed the Department about the mistake. Relying on precedents, the Tribunal concluded that the penalty imposition was not legally sustainable. In conclusion, the Tribunal set aside the penalty imposed on the appellant, emphasizing that when duty is paid along with interest before the issuance of a show-cause notice, and there is no suppression of fact with intent to evade payment of duty, the imposition of penalty is not justified. The Tribunal's decision was based on a thorough analysis of the relevant legal provisions and precedents, ensuring a fair outcome in the appeal.
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