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TMI Blog2015 (4) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... e identical to the facts and issue in hand. It is to be noted that in the case of LG Electronics Pvt. Ltd. (2010 (3) TMI 536 - CESTAT, MUMBAI) the demand was raised under the same proviso i.e. Rule 14 of Cenvat Credit Rules, 2004 read with the provisions of Section 11A(1) of the Central Excise Act, 1944 invoking extended period by alleging suppression of facts with intention to evade duty. - In yet another case of Cosmo Films Ltd (2009 (10) TMI 300 - CESTAT, MUMBAI), the same issue of non-discharge of 4% of CVD was in dispute. The assessee in that case has pleaded that the mistake was bonafide and credit was available to the sister unit hence the issue is of revenue neutral situation. - impugned order is unsustainable and is liable to be set aside - Decided in favour of assessee. - Appeal No. E/1351, 1352 & 1353/07-Mum - Final Order Nos. A/155-157/2015-WZB/EB - Dated:- 20-1-2015 - M. V. Ravindran, Member (J) And P. K. Jain, Member (T),JJ. For the Appellant : Shri M H Patil, Adv. For the Respondent : Shri Rakesh Goyal, Addl. Commissioner (AR) ORDER Per: M V Ravindran: All these appeals are disposed of by a common order as they are raising the same question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court and the same was dismissed as reported at 2014 (308) ELT A118 (Bom.). He would also draw our attention to the decision of this Tribunal in the case of Cosmo Films Ltd. v. CCE - 2010 (251) ELT 130 (Tri. - Mum) which was also considering the same issue but in respect of some other importers. He would submit that even this judgement of the Tribunal was carried in appeal by the Revenue and the same was dismissed by the Hon'ble High Court on 28.07.2011. He produced the copies of the said judgement. It is also his submission that the entire exercise of the Revenue of demanding duty of SAD from the appellant would be revenue neutral as the appellant's co-makers avail CENVAT Credit and discharged duty liability on the colour TV based upon the MRP of the main appellant i.e. MIRC Electronics. He would submit that matter of fact the amount in dispute in these appeals, the co-makers of the appellant had already availed CENVAT Credit paid by the appellant on supplementary invoices. 4. Learned Departmental Representative while drawing our attention to the very same e-mail correspondence between the Senior personnel of the main appellant would submit that when the main appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 14 of Cenvat Credit Rules, 2004 read with first proviso to Section 11A of Central Excise Act, 1944 for invoking the extended period for demanding the amount which is equivalent to an amount of SAD on the parts and components cleared to the co-makers. It is noted from the records the appellants were aware of the computer software glitch which did not indicate the reversal of SAD paid on the parts, components and accessories when they were cleared from the factory premises to their co-makers. The argument put forth by the learned Counsel is that there was no intention to evade duty merits acceptance as appellant has discharged CVD/Central Excise duty on the parts, components and accessories cleared to the co-makers; non-reversal of SAD in our view cannot be with intention to evade duty on such components, in the facts and circumstances of this case, as the appellant had discharged the appropriate duty liability of CVD/Central Excise duty; the argument put forth by the learned A.R. that when the appellants were aware of the software problem in May 2006 they should have approached the department, will not carry the case any further, as it is on record that main appellant was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With effect from 1.3.06 the exemption from SAD to the components in question was withdrawn; the assessee, however, failed to suitably update the software in time. In these circumstances, during the material period, the appellants happened to remove the components without paying SAD at the rate of 4% adv paid on import and availed as credit. On the department pointing out the mistake in September 2006, the assessee made good the short payment. The show-cause notice basic to the proceedings was issued in December, 2007. The appellants submitted that the credit of SAD relatable to electronic components removed during the material period was never utilized and they always had credit in excess of ₹ 2.12 Crores in their CENVAT account during the material period. This showed that the appellants did not have the intention to avail the CENVAT credit wrongly. Therefore, the demand of interest and imposition of penalty were not justified. In support of the claim that in the facts of the case, interest was not leviable, the appellants relied on the judgement of the Punjab Haryana High Court in the case of Ind-Swift Laboratories Ltd. Vs. UOI 2009(240)ELT 328(P H). In the said judgment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trality. This was also the ratio of Lawkim vs. CCE 2007(218)ELT 142(T). 3. The appellants had short paid the duty involved by inadvertence; no penalty could be imposed in the absence of deliberate defiance of law. They relied on the judgement of the Apex Court in the case of Hindustan Steel ltd. Vs. State of Orissa 1978(25)ELT J 159 (SC), among several case laws cited in support. 3.1 We also heard the Ld. DR who submits that undisputedly, the appellants had removed credit availed inputs without reversing an amount equal to the credit availed. They were removed under Rule 3(5) of CCR. The demand of credit was made under rule 14 read with sec.11A and the interest in terms of sec. 11AB of the Act. He submits that the penalty imposed under Rule 15(2) of CCR read with Sec. 11AC of the Act was in accordance with law. He submits that the impugned order deserves to be sustained. 4. We have carefully perused the case records and considered the rival submissions. We find that in the instant case, the appellants imported electronic components required for the manufacture of PCBs for manufacture of CTVs. On import of such components, the assessee had taken the credit of CVD and SAD pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the CENVAT credit in respect of input or capital goods has been taken or utilized wrongly on account of fraud, willful mis-statement, collusion or suppression of facts, or contravention of any of the provisions of the Central Excise Act or the rules made thereunder with intention to evade payment of duty, then the manufacturer shall also be liable to pay penalty in terms of the provisions of section 11AC of the Excise Act. 4.2 We find that the appellants had not taken or utilized Cenvat credit wrongly to attract the provisions of rules 14 or 15 of CCR invoked by the Commissioner. The appellants had not paid the SAD component of the credit availed on import of components at the time of their removal for manufacture of PCBs. We find that the show-cause notice had invoked wrong provisions to recover the short paid SAD. The impugned order confirmed the proposal to demand irregular cenvat credit taken by the assessee. The amount involved is not irregular credit nor so utilized. We find that the demand of duty of ₹ 2,12,40,288/- and penalty imposed are not in accordance with law, since the same has been ordered invoking inapplicable provisions. We vacate the demand of so cal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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