9911796707
TMI Blog2016 (8) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... AT account. By implication, in such a scenario, when there is no adverse deprivation to the exchequer, there cannot be a claim of interest that can be latched on to the assessee. Levy of penalty - Held that:- The proposal in the show cause notice for imposition of penalty should have been accepted and confirmed in toto or not at all. The adjudicating authority cannot travel beyond the SCN. This being the case, and especially taking note of the adjudicating authority's own findings that there is no suppression, fraud etc., the said proposal in the notice for imposition of penalty under Rule 15 read with S 11 AC ibid will necessarily have to be dropped. In consequence the penalty of ₹ 60 lakhs imposed by adjudicating authority as aforesaid under Rule 15 of the Rules will require to be set aside, which we hereby do. Decided in favor of assessee. - E/243/2008 & E/519/2008 - Final Order No. A/30569-30570/2016 - Dated:- 29-6-2016 - Ms. Sulekha Beevi, C.S. Member (Judicial) and Sh. Madhu Mohan Damodhar, Member (Technical) Sh. Karan Talwar, Authorised Representative for the assessee. Sh. V.V. Prasad Rao, Assistant Commissioner (AR) for the Revenue. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the appellant is confining their contest only to the demand of interest and the penalty imposed. He urged that no interest and penalty can be imposed on the appellant since although they had taken the credit on tippers, they had however not utilized the same and had in fact reversed a total amount of ₹ 6,60,61,607/- in April, 2008 from the opening balance of ₹ 8,16,19,079/-. In support of his plea he relied on the following judgments: i. Chandrapur Magnet Wires (P) Ltd., Vs. CCE [1996 (81) ELT 3 (SC)] ii. CCE Vs. Ashima Dyecot Ltd., [2008 (232) ELT 580 (Guj)] iii. CCE Vs. Bombay Dyeing Mfg Co. Ltd., [2007 (215) ELT 3 (SC)] iv. CCE vs. Bill Forge Pvt. Ltd., [2012 (279) ELT (Kar)] v. CCE Vs Gokaldas Images (P) Ltd., [2012 (278) ELT (Kar)] vi. CCE Vs. Pearl Insulation Ltd. [2012 (27) STR 337 (Kar)] vii. CCE, Vs. Strategic Engineering (P) Ltd., [2014-TIOL-466-HC-MAD-CX] viii. CCE vs. Dynaflex Pvt Ltd.,[2011 (266) ELT 41 (Guj)] ix. RINL vs. CCE-Final Order No. A/30202/2016 dated 14.03.2016 (Tri-Hyd) x. Ganta Ramanaiah Naidu Vs. CCE [2010 (18) STR 10 (Tri-Bang)] xi. Grasim Bhiwani Textiles Ltd., Vs CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in number of High Court and Supreme Court judgments. 9. The Hon'ble Apex Court in the case of CCE, Mumbai-I Vs Bombay Dyeing Manufacturing Company Ltd., [2007 (215) ELT 3 (S.C.)] has interalia held that where credit taken but reversed before utilisation amounts to not taking credit. The relevant portion of the judgement is reproduced below: 8 . There is no merit in this civil appeal. Under the notification, mode of payment has not been prescribed. Further, exemption is given to the final product, namely, grey fabric under the Central Excise Act, 1944, levy is on manufacture but payment is at the time of clearance. Under the Act, payment of duty on yarn had to be at the spindle stage. However, when we come to the Exemption Notification No. 14/2002-C.E., the requirement was that exemption on grey fabrics was admissible subject to the assessee paying duty on yarn before claiming exemption and subject to the assessee not claiming CENVAT credit before claiming exemption. The question of exemption from payment of duty on grey fabrics arose on satisfaction of the said two conditions. In this case, payment of duty on yarn on deferred basis took place before clearance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reads as under : Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded. - Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacture or the provider of the output service and the provisions of sections 11A and 11AB of the Excise Act or sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries. A reading of the aforesaid provisions makes it very clear that the said provision is attracted where the Cenvat Credit has been taken or utilized wrongly or has been erroneously refunded. In view of the aforesaid judgment of the Apex Court, the question of reading the word and in place of or would not arise. It is also to be noticed that in the aforesaid Rule, the word avail is not used. The words used are taken or utilized wrongly . Further the said provision makes it clear that the interest shall be recovered in terms of Section 11A and 11B of the Act. 20. From the aforesaid discussion what emerges is that the credit of excise duty in the register maintained for the said purpose is only a book entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit. On getting the clarification from TRU in April, 2011, the appellant reversed the entire amount of Cenvat credit. In the above circumstances, the only question arises whether in terms of Rule 14 of the Cenvat Credit Rules, 2004, the appellant can be said to have taken credit wrongly. When the credit was not taken wrongly, the question of payment of interest does not arise. In this case, the circumstances discussed above show that the appellant could not have acted any other way than the way they did. In the circumstances, holding that credit was not admissible and was taken without eligibility and therefore asking them to pay interest was not correct. Moreover, any assessee, if he has any doubt, has a right to ask the department and such action is not contrary to the provisions of law. Further, in the circumstances of this case, it cannot be said that the credit had been taken by the appellant wrongly. When credit is not taken wrongly, the question of payment of interest does not arise in terms of provisions of Rule 14 of C.C.R. 2004. In these circumstances, we do not find that the appellant is liable to pay interest since credit taken by them is not wrong in the first p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st from imposition of penalty. When the SCN has proposed imposition of penalty in terms of Rule 15 read with 11AC of the Act, (emphasis added), it is not open to the adjudicating authority to selectively impose penalty only under Rule 15 and that too under the more benign Rule 15(1). The proposal in the show cause notice for imposition of penalty should have been accepted and confirmed in toto or not at all. The adjudicating authority cannot travel beyond the SCN. This being the case, and especially taking note of the adjudicating authority's own findings that there is no suppression, fraud etc., the said proposal in the notice for imposition of penalty under Rule 15 read with S 11 AC ibid will necessarily have to be dropped. In consequence the penalty of ₹ 60 lakhs imposed by adjudicating authority as aforesaid under Rule 15 of the Rules will require to be set aside, which we hereby do. We however do not interfere with the order of the adjudicating authority treating the credit of ₹ 6,60,61,607/- taken by assessee as ineligible credit and ordering them to pay the same back. It is further clarified that as decided, above no interest liability will accrue on the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
