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TMI Blog2018 (6) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... tems. The case of the department is that the appellant was supposed to reverse the cenvat credit under Rule (3A) of the Cenvat Credit Rules, 2004 attributed to the trading activity being an exempted service. The demand of cenvat credit was confirmed and a penalty of equal amount was imposed under Section 11AC. The learned Commissioner (Appeals) upheld the order-in-original. Therefore, the appellant is before me. 3. Shri Rajesh Ostwal, learned counsel appearing on behalf of the appellant, submits that the appellant has been availing cenvat credit on common input service prior to 1.4.2012 and manufacturing the excisable goods as well as doing the trading activity. From 1.4.2012, the trading activity was made exempted service in terms of clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o made out on the basis of records. As per Section 11AC(1B) of the Central Excise Act, 1944 if the case is made out on the basis of records, penalty shall stand reduced to 50%. Therefore, in any case, 100% penalty is not correct. 4. Shri M.R. Melvin, learned Superintendent (AR) appearing on behalf of the Revenue, reiterates the finding of the impugned order. He placed reliance on the following judgments:- (i) Bajaj Hindustan Ltd. vs. UOI - 2013 (295) ELT 20 (All.). (ii) CCE, Chennai-II vs. SRF Ltd. - 2014 (305) ELT 519 (Mad.). 5. I have carefully considered the submissions made by both the sides and perused the records. I find that in the present case, the demand is under Rule 69(3A) of the Cenvat Credit Rules, 2004, which reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisionally pay every month, the amounts determined under sub-clauses (i) and (iv), namely :- (i) the amount of CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for provision of exempted services shall be called ineligible credit, denoted as A, and shall be paid; (ii) the amount of CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufacture of non-exempted goods removed or for the provision of non-exempted services shall be called eligible credit, denoted as B, and shall not be required to be paid; (iii) credit left after attribution of credit under sub-clauses (i) and (ii) shall be called co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally and retain credit of B and G, namely, eligible credit and eligible common credit and shall provisionally pay the amount of credit of A and D, namely, ineligible credit and ineligible common credit. (vi) where manufacturer or the provider of the output service fails to pay the amount determined under sub-clause (i) or sub-clause (iv), he shall be liable to pay the interest from the due date of payment till the date of payment of such amount, at the rate of fifteen per cent. per annum; (c) the manufacturer or the provider of output service shall determine the amount of CENVAT credit attributable to exempted goods removed and provision of exempted services for the whole of financial year, out of the total credit denoted as T (Annual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial year; (d) the manufacturer or the provider of output service shall pay on or before the 30th June of the succeeding financial year, an amount equal to difference between the total of the amount of Annual ineligible credit and Annual ineligible common credit and the aggregate amount of ineligible credit and ineligible common credit for the period of whole year, namely, [{A(Annual) + D(Annual)} - {(A+D) aggregated for the whole year)}], where the former of the two amounts is greater than the later; (e) where the amount under clause (d) is not paid by the 30th June of the succeeding financial year, the manufacturer of goods or the provider of output service, shall, in addition to the amount of credit so paid under clause (d), be l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the date of payment of the amount; (iv) interest payable and paid, if any, determined as per the provisions of clause (e); and (v) credit determined and taken as per the provisions of clause (f), if any, with the date of taking the credit". 5.1 As per above Rule 6(3A), it can be seen that the only requirement is to pay the proportionate cenvat credit along with interest @ 24%. There is no provision for imposition of penalty. The penalty provisions under the Cenvat Credit Rules are provided under Rule 14 which reads as under:- "Recovery of CENVAT credit wrongly taken or erroneously refunded. - Where the CENVAT credit has been taken and utilized wrongly or has been erroneously refunded, the same along with interest shall be recove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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