2023 (6) TMI 584 - AT - Central Excise

Recovery of interest on wrongly availed Cenvat Credit by the respondent/ assessee - appropriation of credit which admittedly the respondent/assessee has already reversed - penalty on the respondent under the provisions of Rule 15(2), Cenvat Credit Rules, 2004 r/w Section 11AC of Central Excise Act, 1944. HELD THAT - The impugned order has been passed in a most unusual way. There is no reasoning given in reaching the conclusion. Although it s a detailed order but in all those pages firstly the submissions of assessess s has been recorded followed by the submissions of revenue and thereafter in last two lines it has been concluded that In view of the above, the impugned order is set aside, with consequential relief as per law. Appeal allowed. There is a basic principle that justice need not only be done but also seen to be done. There is neither any reasoning nor any finding that too while setting aside the reasoned order passed by the adjudicating authority. Assessee s appeal was allowed by way of non-speaking order and entire adjudication order was set aside after citing one decision of Hon ble Karnataka High Court which seems to be limited to the issue of interest liability - Learned Commissioner ought to have, after referring the contentions of the appellant, dealt with the same on merits and also ought to have dealt with each finding/reasoning recorded by the adjudicating authority in its Order-in-Original before setting aside the said order. Matter remanded back to the learned Commissioner (Appeals) for fresh disposal on its own merits in accordance with law after giving reasonable opportunity of hearing to both the side and also by giving reasoning/findings while arriving at any conclusion in the appeal filed by the assessee. Appeal allowed by way of remand.

Summary

Issues involved:
The judgment involves the recovery of interest on wrongly availed Cenvat Credit, appropriating credit already reversed by the respondent, and the imposability of penalty under Rule 15(2) of Cenvat Credit Rules, 2004 r/w Section 11AC of Central Excise Act, 1944.

Recovery of Interest on Wrongly Availed Cenvat Credit:
During an audit, it was discovered that the respondent had wrongly availed Input Service Credit of Rs.24,45,094 on input services used for non-excisable goods without maintaining separate accounts. The respondent reversed this amount upon audit notification but did not pay interest on the wrongly availed credit. A show cause notice was issued for the recovery of the reversed amount and interest of Rs.3,49,000. The Adjudicating Authority confirmed the demand, interest, and penalty. However, the Commissioner set aside the order citing lack of reasoning. The Tribunal remanded the matter back to the Commissioner for a fresh disposal, emphasizing the need for a reasoned decision and a fair hearing for both parties.

Appropriation of Reversed Credit and Penalty Imposability:
The issue also pertains to appropriating the reversed credit of Rs.24,45,094 by the respondent and the imposability of penalty under Rule 15(2) of Cenvat Credit Rules, 2004 r/w Section 11AC of Central Excise Act, 1944. The Adjudicating Authority had confirmed the demand, interest, and penalty, which was set aside by the Commissioner without providing adequate reasoning. The Tribunal emphasized the importance of justice being seen to be done and the need for a reasoned decision. The matter was remanded back to the Commissioner for a fresh disposal with proper consideration of the contentions and findings before arriving at a conclusion.