2020 (3) TMI 1181 - AT - Central Excise

Imposition of penalty - irregularly availed CENVAT Credit - credit availed on the same invoice twice in the month of June 2014 - It is contended that, they had no intention to evade payment of Cenvat credit and they had already reversed the amounts on being pointed out by the department - HELD THAT - There are no doubt that the appellant had wrongly availed Cenvat credit twice in the same invoice. It is not the case where one could have a doubt about the admissibility of such Cenvat credit. Evidently, nobody can legitimately claim Cenvat credit twice on one invoice. Similarly, with respect to the capital goods removed after use, they have reversed inadequate amount of Cenvat credit which remains undisputed. The intention is self evident and the violation of Act and Rules are undisputed - Appeal dismissed - decided against appellant.

Summary

Issues:
1. Availment of Cenvat credit twice on the same invoice.
2. Short payment of Cenvat credit on capital goods cleared after use.
3. Imposition of penalty for irregular Cenvat credit availed.

Analysis:
1. The appellant, a manufacturer of Hydraulic Cylinders, availed Cenvat credit twice on the same invoice in June 2014. The department issued a show cause notice proposing recovery of irregularly availed credit and imposition of penalties. The appellant admitted the error but argued that they had rectified it upon notification by the department. The adjudicating authority confirmed the demands and imposed penalties under Rule 15(2) of CCR, 2004. The first appellate authority upheld this decision. The appellant contested the penalty imposition, claiming lack of intent to evade payment and sufficient balance in their Cenvat credit account.

2. The departmental representative argued that the appellant's actions demonstrated an intention to evade payment by availing ineligible Cenvat credit and not fully reversing credit on capital goods clearance. The representative contended that the appellant's reversal upon detection did not absolve them of guilt. The tribunal found that the appellant had indeed availed credit twice on the same invoice and had not fully reversed credit on capital goods cleared after use. The tribunal concluded that the appellant's actions evidenced intent to evade payment, justifying the penalty imposition.

3. The tribunal upheld the impugned order, citing the undisputed violations of the Act and Rules by the appellant. It emphasized that the appellant's actions clearly indicated an intent to evade payment by availing irregular Cenvat credit. The tribunal found no fault in the penalty imposition, as the appellant's violations were established beyond doubt. The appeal was rejected, and the impugned order was upheld, affirming the penalties imposed by the lower authorities.