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TMI Blog2017 (3) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty - Held that: - the penalty imposed by the Commissioner (Appeals) requires to be set aside in its entirety as it is not in order with the proposal in the SCN - penalty set aside. Appeal disposed off - decided partly in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... the order. The appellants are thus b a fore the Tribunal. 5. On behalf of the appellant) the Ld. Counsel Shri. Ram Reddy, submitted that the not contesting the demand of ₹ 8,71,399/- confirmed regard to shortage of inputs other than DMS. The appellant in this regard is confining the challenge only in respect of interest on this demand and the penalty imposed thereon. It is the case of the appellant that as there is no allegation for clandestine removal of goods and when the date of removal of goods (inputs) is not determined by the department, interest cannot be demanded on shortage of inputs, which are alleged to be clandestinely removed. To canvass the proposition that no interest can be demanded he relied upon the judgment in the case of CCE, Ahmedabad Vs Kamal Steel Re-Rolling Mills [2009 (235) ELT 123 (Tri. - Ahmd.)] and H.M. Pipes Pvt. Ltd. Vs Jaipur [2015 (325) ELT 924 (Tri. Del.)]. The Ld. Counsel also submitted that the appellants had reversed the credit in regard to the demand of ₹ 8,71,399/- before utilization and therefore are not liable to pay the interest. With regard to the penalty imposed in regard to this demand the Ld. Counsel adverted to the operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts during the relevant period, if the appellant had not actually received the inputs as per these two invoices. The Ld. Counsel therefore, contended that the department has failed to establish that appellant indulged in fraudulent availment of credit That department is relying on documents maintained by the dealer M/s. Aerochem Impex and the invoices issued by YM Drugs to conclude that appellant has not received the goods. That as per RG-23 register maintained by M/s Aerochem Impex Pvt Ltd., shows that the subject material (DMS) was received by them on two invoices NO. 59 & 60 dated 10.12.2008. The credit is sought to be denied stating that M/s. YM Drugs has been receiving fake invoices passed on by M/s. Aerochem Ltd., on the pretext that these are Issued by M/s. Cosmos Sales Corporation, a fictitious firm. That the department has wrongly linked the invoices No. 231 & 232 issued by YM Drugs with invoices No. 59 & 60 issued by Aerochem impex Pvt. Ltd., to the appellant. That if the department had conducted investigation with the lorry owner/driver and checked the check post on the relevant dates to find the movement of the subject material the true facts would come to light. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and these were discounted through cheques discounting. That the evidence in such fraudulent availment of credit cannot be established by mathematical precision and the documents as well as statements would establish that appellants have indulged in availing fraudulent credit on two fake invoices. It is also pleaded by the Ld. AR, that the penalty imposed by the Commissioner (Appeals) under Rule, 15(1) of Credit Rules 2004 is correct and requested that penalty equal to the demand of ₹ 3,70,800/- may be maintained. That the Senior Manager, Shri. S.S.N. Varma was the person who was in charge of receiving the inputs and therefore the penalty imposed on him is right and proper. 8. I have heard the submissions made by both sides. 9. The first issue argued by Ld. Counsel for appellant is regarding the liability to pay interest on demand of ₹ 8,71,399/- which is confirmed on the ground of shortage of inputs other than DMS. The Counsel has relied upon the judgments laid in the case of H.M Pipes Pvt. Ltd., (supra) and Kamal Steel Re-Rolling Mills (supra). In the said cases the Tribunal observed that in the case of shortage of inputs when no firm date of removal is established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he credit without actual receipt of goods Therefore, uphold the confirmation of demand of ₹ 3,70,800/- and interest thereon. 11. The next issue to be addressed is with regard to the penalty imposed. As already discussed in the preceding paragraph No. 8, the original authority has imposed a composite penalty of ₹ 12,42,199/- on both counts. The Commissioner (Appeals) has modified the same and reduced it to ₹ 4,36,000/- which again appears to be composite penalty. There is no bifurcation of the penalty on the two counts for which demand is confirmed by both the authorities below. In the Show Cause Notice, the proposal is to impose penalty under Rule, 15 read with Section 11AC Central Excise Act, 1944. The Commissioner (Appeals) has proceeded to impose penalty under Rule, 15 (1) of CENVAT Credit Rules, 2004. The co-ordinate Bench of the Tribunal in a similar situation observed as under: The assessee has also appealed against the imposition of penalty. We find that in the Cause penalty was proposed in terms of Rule, 15 of CCR, 2004 read with Section 11AC of the Excise Act. 1944 However, the adjudicating authority did not find much force for imposing penalty under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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