2024 (3) TMI 342 - AT - Central Excise

Scope of SCN - no demand for penalty - Default in making the payment beyond thirty days from the due date of payment - bar to utilize the CENVAT Credit account for payment of duty - Rule 8(3A) of the Central Excise Rules, 2002 - HELD THAT - It is found that in the Show Cause Notice, there is no proposal to impose penalty of Rs.7,43,28,193/-. The Show Cause Notice has not even demanded the said amount as duty from the respondent. The appeal filed by the Revenue is not maintainable before this Tribunal since the appeal has been filed in a cyclostyled manner without appreciating the facts of the case and without examining the impugned order. The appeal filed by the Revenue is dismissed.

Summary

Issues involved:
The issues involved in this case are related to demand of duty, utilization of CENVAT Credit account, imposition of penalty, and appeal against the order passed by the adjudicating authority.

Demand of Duty:
The case involved a demand of duty amounting to Rs. 7,43,28,193 against the respondent for default in payment from May 2007 to July 2010. The adjudicating authority confirmed the demand and ordered recovery of outstanding amounts under relevant sections of the Central Excise Act, 1944. The respondent had paid a portion from PLA and utilized CENVAT Credit, with a balance remaining unpaid.

Utilization of CENVAT Credit Account:
It was found that the respondent had defaulted in making payments within the stipulated time period, leading to a proposal to deny the utilization of CENVAT Credit account for payment of duty. The Show Cause Notice was issued to the respondent to demand the defaulted amount along with interest and penalty under applicable rules and sections of the Central Excise Act, 1944.

Imposition of Penalty:
The adjudicating authority imposed a penalty of Rs. 80,63,100 on the respondent under Rule 25(1)(a) of the Central Excise Rules, 2002, subject to provisions of Section 11AC of the Act. The penalty was confirmed along with the demand and interest. The Revenue appealed against the order, seeking a higher penalty amount based on the duty demand payable by the respondent during the relevant period.

Appeal Against the Order:
The Revenue appealed the order of the adjudicating authority, contending that a higher penalty should have been imposed corresponding to the duty demand of Rs. 7,43,28,193. However, upon review, it was observed that the Show Cause Notice did not propose or demand the penalty amount of Rs. 7,43,28,193 from the respondent. Consequently, the appeal by the Revenue was deemed not maintainable by the Tribunal due to lack of merit and understanding of the case facts.