9911796707
TMI Blog2010 (4) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... resulted in short payment of excise duty from July, 2008 onwards. The petitioner furnished a chart showing the excess/short CENVAT credit taken between the months of May, 2008 and December, 2008 (excluding April) along with the details of correct credit due based on the input invoices and the credit taken. Admitting the liability on the short payment of duty, the petitioner remitted a sum of Rs. 86,75,640.00 along with interest at Rs. 3,18,191.00. The petitioner further stated that since they had paid duty and interest, the short payment together with interest be treated as duty paid and the omission regularised as per the provision of Section 11A(2B) of Central Excise Act, 1944. However, thereafter, the respondents called upon the petitioner to appear for an enquiry. Accordingly, the Chief Executive Officer of the petitioner company appeared before the Superintendent of Central Excise on 16-2-2009, wherein he stated that the person in, charge of the Central Excise accounts in their company had done this mistake without the Knowledge of the company management. Hence, admitting the said mistake, they had paid the excess credit taken along with interest. It is further stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailed for the reason that during the months July, 2008 to December, 2008 there was no sufficient balance in CENVAT Credit account for the payment duty on the goods removed, which we have paid at a later date along with interest................." 3. In the background of the said facts, proceedings now initiated has to be noted. It is seen that on 20-11-2006, the Commissioner of Central Excise issued a circular seeking comments on deterrent provisions to discourage the problem of planned and deliberate non-compliance. Based on the above circular a notification was issued in Notification No. 32/2006, dated 30th, December 2006. The notification contains the withdrawal and imposition of certain restrictions as regards the payment of duty for utilisation of CENVAT credit, and availing the facility of monthly payment of duties. To provide sufficient safeguard against the misuse, it was contemplated that the proposal for withdrawal of the facilities would be forwarded by the jurisdictional Commissioner or Additional Director General (CEI) to the Chief Commissioner or Director General (CEI). The Zonal Chief Commissioner/Director General (CEI) will examine the proposal after giving an oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lved in committing any one or more type of offences as specified in para 1 for the second time or subsequently, every removal of goods from his factory may be ordered to be under an invoice which shall, be countersigned by the Inspector of Central Excise or the Superintendent of Central Excise before the said goods are removed from the factory or warehouse. 4. In the context of the said administrative instructions, proceedings were initiated against the petitioner which ultimately culminated in the order passed by the Revenue on 4-1-2010. The order referred to the preliminary scrutiny as to the quantum of duty paid as against the CENVAT credit taken by the assessee. The Superintendent of Central Excise called upon the petitioner to furnish the documents pertaining to the claim. The petitioner, however, did not furnish the input invoices. Subsequently, the petitioner informed the Superintendent of Central Excise as to the excess availing of the credit in the month of July, 2008 and September to December, 2009. Thereafter, they deposited the amount with interest. In the background of these facts, the removal of goods were without, a power of an invoice and without, payment of duty, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 32 of 2006 and there are no grounds to bring the case of the petitioner under the enumerated clauses of the Notification to impose restriction on the payment of duty and the availing of CENVAT Credit. He further pointed out that no motive could be attributed to the petitioner herein and it was only on account of one B. Gnanasekaran, who was in charge of the maintenance of accounts and filing of returns, that the mistake had occurred. In the circumstances, the order passed imposing restrictions is arbitrary, apart from harsh and disproportionate. Considering the conduct of the petitioner, the order has to be set aside, learned counsel for the petitioner pointed out to the recommendation of the Commissioner in favour of the petitioner which had been ignored while passing the order. In the circumstances, he seeks to quash the order of the first respondent dated 4-1-2010. 6. Per contra, learned Standing Counsel appearing for the Central Excise Board, apart from reiterating the stand taken in the counter affidavit, pointed out to the notification and circular issued explaining the background under which the notification came to be made. He pointed out that when the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval of goods without payment of duty and availing of CENVAT credit which otherwise is not justifiable. 8. Considering the fact that the petitioner herein availed CENVAT credit and there was removal of goods without payment of duty, on the admitted lapse, rightly, the restrictions were imposed. The mere facts of payment of duty with interest does not absolve or cleanse the petitioner of the violations committed by the petitioner. Hence, on the substantiated fact, that the petitioner had knowingly committed this violation as spoken to in paragraph 1 of the Notification, imposing the restrictions on the payment of duty availing of CENVAT credit and that too for a limited period by respondents cannot be viewed be an arbitrary exercise. Given the fact that the evidence on record shows that the petitioner had illegally availed the CENVAT credit facility and the statement of the Chief Executive Officer recorded on 6-3-2009 clearly establishing the fact that during December, 2008, there was no sufficient balance in CENVAT credit for payment of duty on the goods removed; that they had paid the duty only subsequently with interest, that too when confronted by a scrutiny, thus clearly show ..... X X X X Extracts X X X X X X X X Extracts X X X X
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