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TMI Blog2018 (4) TMI 1495X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant - denying and demanding the wrongly availed self-credit on first instance is not sustainable. Admittedly, the appellant followed the correct procedure on the second time though on the first instance they have wrongly taken direct self-credit. Interest and penalty - Held that: - the inadvertent mistake in the first instance was rectified later by following due procedure - interest and penalty also do not sustain. Appeal allowed - the appeal file is returned back to the regular bench for further action. - E/1236/2009-DB - Final Order No. 62265/2018 - Dated:- 23-4-2018 - Mrs. Archana Wadhwa, Member (Judicial) and Mr. Devender singh , Member (Technical) Shri. Anuj Sharma, Advocate for the appellants (s) Shri.V Gupta, A.R. for the Respondent(s) ORDER Per : Archana Wadhwa After hearing both the sides duly represented by Shri. Anuj Sharma Ld. Advocate for the appellant and Shri. V. Gupta Ld. AR for the Revenue, we find that the appellant is engaged in the manufacturer of medicines, in their factory located in the area of Jammu. The appellant was working in terms of exemption Notification No. 56/2002-CE dated 14.11.2002. The said notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and utilising the same for payment of duty on the final product, the appellant s action of payment of duty by cash and subsequently claiming the refund has resulted in erroneous excess refund to the assessee which was not admissible to them. As such he observed that the appellant has engaged themselves in suppression and mis-statement leading to availment of excessive erroneous refunds of a considerable amount, thus calling for imposition of penalties. He accordingly ordered recovery of wrongly availed refund of self credit of ₹ 14,51,695/- under Section 11(A) of the Central Excise Act 1944 along with recovery of interest and further imposed penalty of identical under Section 11(C). 5. After hearing both the sides we find that there is no dispute about the facts. In terms of the notification, the appellant was first required to avail the Cenvat credit of duty paid on the raw materials and to exhaust the same first before paying the deficient duty, if any, through cash. As per the appellant, they did not avail the credit of additional duty of customs under a bona fide he belief that the same is not available to them. Consequently they paid the duty on their final product t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a particular course of action, the assessee was unduly benefited. In the present case instead of being benefited, the appellant faced disadvantage on account of non-availment of credit. As such we find no justification for imposition of penalty on them. 10. In view of the foregoing, we find no merit the impugned order. The same is set aside and appeal is allowed with consequential relief. (Order dictated and pronounced in the court) Devender Singh Member (Technical) Archana Wadhwa Member (Judicial) Per Devender Singh: 11. Having gone through the order of Hon ble Member (Judicial), I pass a separate order. 12. In the Notification No. 56/2002-CE, it is mandatory for the manufacturer to first utilise the whole of the cenvat credit available to them on the last day of month. The mechanism of implementation of exemption given by the Notification has an intrinsic monthly orientation. Hence, the extent of exemption given for the particular month is decided by the cenvat credit available at the end of the month, which has to be exhausted before paying the remaining duty through the PLA. Reading of opening lines of Para 1(A) of the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his, the mistake, if any, was bona-fide which would no doubt deprive the assessee of the benefit of the exemption notification but it is notification but it is not a case where any penalty or interest should be imposed. We, therefore, set aside the penalty as well as interest charged by the Revenue. 13. The above ratio is directly applicable to facts of the case in hand. Accordingly, I find that there is no infirmity in the order of Ld. Commissioner (A) as far as demand of wrongly availed refund of self credit is concerned. However, I find that the appellant is manufacturer who is regularly availing the benefit of this notification and have stated that it was due to mistake on the part of excise personnel at the factory, which appears to be bona-fide particularly since they have attempted to rectify the mistake later. In these circumstances, and by following the decision of Hon ble Apex Court in Honda Siel Power Products Ltd. (Supra) while the assessee would be denied the benefit of Notification because of noncompliance with the condition thereof, the imposition of interest and penalty are liable to be set aside. 14. In view of the above, I uphold the order of Ld. Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the same and availing self-credit on only excess payment, however, later in order to rectify the said mistake, the said amount which was already availed as self-credit was entered into in the Cenvat credit books. This was utilized for payment of duty on final products. The net result is on this subsequent utilization of credit the payment by cash got reduced resulting in less refund to the appellant. In such situation, I note that again denying and demanding the wrongly availed self-credit on first instance is not sustainable. Admittedly, the appellant followed the correct procedure on the second time though on the first instance they have wrongly taken direct self-credit. Since, the learned Member (Technical) has recorded that no interest or penalty is imposable, in the present case I note that the inadvertent mistake in the first instance was rectified later by following due procedure. As such, I note that there is no justification to uphold the demand of self-credit which in any case has gone through the process of the Cenvat credit later. Accordingly, I find no reason to uphold such demand, though without interest and penalty. 3. In view of the above analysis and decision, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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