9911796707
TMI Blog2014 (2) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... tted on the following substantial question of law:- "Whether on the facts and in the circumstances of the case, the second respondent Tribunal is correct in passing the Final Order Nos.980 & 981 of 2009, dated 07.08.2009 in dismissing the appeal filed by the appellant with regard to imposition of penalty under Section 11AC of the Central Excise Act, 1944, without rendering a finding as to its non-applicability?" 2. The respondent/assessee are manufacture of Seats and Auto Interiors for cars falling under Chapter Heading No.9401 and 8708 respectively of the Central Excise Tariff Act, 1985. The assessee were availing Cenvat Credit on inputs including non-woven fabrics stating that due to heavy rain on 12.05.2001, non-woven fabrics kept in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit on inputs which were not used in the manufacture of final products. The assessee was called upon to explain as to why the wrongly availed credit should not be disallowed, why penalty should not be imposed under Section 11AC of the Act read with Rule 13 of the Cenvat Credit Rules, 2002 and why interest should not be demanded under Rule 12 of the Cenvat Credit Rules, 2002, read with Section 11AB of the Act. 3. In the written submissions of the assessee, it was stated that the fabrics were damaged due to heavy rain and fabrics were not inputs as such, but have been issued for production, cut into required patterns and that apart the quantity was converted as seat covers and as the inputs have already been issued for production and used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by the Adjudicating Authority, however, waived the penalty without assigning any specific reasons. Aggrieved by the same, the assessee as well as the Revenue preferred appeals to the Tribunal. The Tribunal by common order dated 14.08.2009, dismissed both the appeals, as the assessee did not press their appeal regarding the demand of duty. 5. The Revenue has preferred these appeals against the common order passed by the Tribunal presumably under the belief that the Tribunal has also interfered with the demand of duty, when the fact is that the assessee accepted the demand of duty and not pressed their appeal before the Tribunal. Therefore, there one appeal at the instance of the Revenue would alone survive for consideration. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion or partly used in the production i.e., work in progress. Even before the first Appellate Authority, the assessee were not able to produce any material to prove this fact. Therefore, the order passed by the Original Authority as confirmed by the Appellate Authority, is fully justified. 9. The first Appellate Authority while confirming the order passed by the Original Authority as regards the demand of duty, by a single line deleted the penalty imposed. The penalty has been imposed on account of the contumacious conduct of the assessee by suppressing material facts with an intent to evade payment of duty. On a reading of the show cause notice dated 20.10.2004, it is clear that the Authority has given a specific finding that there was wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded a finding that the conduct of the assessee was with an intention to evade payment of duty, the penal provisions stand attracted and penalty is imposable. 10. Therefore, we have no hesitation to allow the appeal filed by the Revenue and the order of penalty. As regards the order for payment of interest, that being for the delayed payment is automatic and the assessee is liable to pay interest as applicable on the Cenvat Credit disallowed under Section 11AB of the Act read with Rule 12 of the Cenvat Credit Rules, 2002, is restored to file. Accordingly, C.MA.No.1141 of 2010 is allowed and nothing survives for consideration in C.M.A.No.1142 of 2010, since the assessee itself has not pressed the Appeal before the Tribunal and the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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