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TMI Blog2015 (4) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that the credit facility in respect of the capital good was wrongly used on account of fraud, willful misstatement, collusion or suppression of fact. It is also not an intentional contravention of any statutory provision. At best it may amount to misunderstanding the law and its applicability and in the absence of any mens rea on the part of the assessee, if two Appellate Authorities namely the Commissioner and the Appellate Tribunal found that imposition of penalty in the instant case is not called for as there is no sufficient evidence to prove Mens rea or guilt on the part of the assessee, we see no reason to interfere with such a reasonable approach adopted by Appellate authorities concurrent in nature. Imposition of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely. 2. Respondent Company has established a cement plant which is situated in Babupur, District Satna. It is engaged in the manufacture of cement clinker and cement and is registered with the Central Excise Authorities and is availing the benefit of CENVAT credit in terms of the CENVAT Credit Rules, 2004. During the assessment year in question, petitioner availed of the benefit of capital good CENVAT amounting to ₹ 44,67,572/on rail tracks, 'concrete sleepers' and 'brackets connectors' used for laying down railway tract from the petitioner's manufacturing unit to the railway yard. It was said that the material so used comes within the definition of capital goods as per rule 2(a) of the CENVAT Credit Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of deliberate evasion of duty, the Appellate Authority committed error in interferring with the discretions exercised by the Assessing Officer in imposing penalty. 5. However, refuting the aforesaid, Shri Avinash Zargar invited our attention to Rule 15(2) of the CENVAT Credit Rules, 2004 and argued that in respect of inputs and capital goods penalty can be imposed only if it is found that the benefit of credit is sought on wrong or fraudulent grounds, by making wilful misstatement, collusion or suppression of facts, or in contravension to any of the provisions or statute or Rules framed thereunder with a view to evade payment of duty. It is said that in the present case on a wrong assumption of a legal provisions and heavily placing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or contravention of any of the provisions of the Excise Act or the rules made thereunder with intention to evade payment of duty. The aforesaid provision clearly contemplates that in cases where the CENVAT credit in respect of capital good has been taken or utilized wrongly on account of fraud, willful misstatement, collusion or suppression of fact or contravention of any provision of the Act or Rules made thereunder, with an intention to evade payment of duty then only penalty is liable to be imposed. In the present case Rajasthan High Court in the case of another manufacturing Unit namely Aditya Cement came to the conclusion that the Railway Track along with locomotive used by a cement factory for the purpose of transportation of its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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