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TMI Blog2022 (11) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... me situation the appellant was acting under a bonafide belief and no malafide intention could have been attributable to them for imposition of penalty under Section 11AC of the Central Excise Act. Then what the Commissioner has held in respect of these demands cannot be sustained. There are no justification in imposition of penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act - appeal allowed. - Excise Miscellaneous Application No. 85312 of 2022, Excise Appeal No. 86339 of 2015 - FINAL ORDER NO. A/86080/2022 - Dated:- 14-11-2022 - MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) AND DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Shri Rajan Mishra, Advocate, for the Appellant Shri Deepak Bhilegaonkar, Additional Commissioner, Authorised Representative for the Respondent ORDER This miscellaneous application for early hearing has been filed by the applicant stating the following grounds:- 7. The Applicant therefore submits that it is left with no other remedy but to file this present early hearing application. The applicant submits that the present issue being covered by the aforesaid judgments the Hon ble Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 I order recovery of interest under the provisions of Section 11AB of the Act, read with Rule 14 of the CCR, 2004, as applicable during the relevant period, on the amount of demand as confirmed at Para 25.1 above, and order appropriation of an amount of Rs.12,13,947/- already paid by the assessee as interest towards the above demand; 25.3 I impose a penalty of Rs.73,56,672/- (Rupees Seventy Three Lakhs Fifty Six Thousand, Six Hundred Seventy Two only on the assessee, i.e. M/s.L'Oreal India Pvt. Ltd., Chakan, Pune, under the provisions of Rule 15(2) of CCR, 2004, read with Section 11AC of CEA, 1944, for having failed to reverse the Service Tax credit attributable to services utilized commonly for the manufacture of excisable goods as well as for traded goods and non-excisable goods. 25.4 I confirm the demand of Rs. 63,67,519/-, (Rupees Sixty Three Lakhs Sixty Seven Thousand, Five Hundred Nineteen Only) in respect of the CENVAT credit wrongly availed by the assessee on raw material(s) used for non-excisable goods, during the period from April 2004 to August 2006 under the provisions of Section 11A (2) of the Act, read with Rule 14 of CCR, 2004. I also order appropriati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11 AC of the CEA, 1944; (iv) Inadmissible CENVAT credit amounting to BED -Rs.75,37,812/- plus Edn. Cess - Rs.1,50,755/- paid on services used for traded and non-excisable goods and BED - Rs.58,83,743/- plus Edn.Cess - Rs.1,10,448/- plus AED - Rs.3,73,328/- paid on raw material used for non-excisable goods should not be adjusted against the total duty demanded and balance amount of BED-Rs.2,77,00,973/- plus Edn.Cess- Rs.5,54,021/- for services used in traded and non- excisable goods should not be recovered from them; (v) Interest amounting to Rs.19,94,658/- paid by them should not be adjusted against the total interest liability. 4.5 The show cause notice was adjudicated by the Commissioner of Central Excise, Pune-I vide order-in-original No. 03/CEX/2008 dated 27.02.2008. Against this order, appellant filed an appeal before the Tribunal and the Tribunal vide its order No. A/121/12/EB/C-II dated 06.01.2012 remanded the case back to the original adjudicating authority. 4.6 In the remand proceedings, Commissioner vide order-in-original No. 01/RKS/CEX/P-I/2013 dated 15.02.2013 again decided the issue holding as follows:- (a) Confirmed the demand of Rs.63,67,51 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, the impugned order is set aside and the matter remanded to the adjudicating authority for de-novo adjudication and to decide afresh after affording an opportunity of hearing to the appellant. The appeal is allowed by way of remand. 4.8 Against the same order-in-original, in remand proceedings, dated 15.02.2013, Revenue also filed an appeal to the Tribunal and the Tribunal vide its order No. A/305/14/EB/C-II dated 11.04.2014 remanded the matter stating as follows:- ..we are of the considered view that the appeal filed by the Revenue should also go back to the adjudicating authority and the grounds urged in the appeal memorandum also should be taken note of by the adjudicating authority while passing the denovo adjudication order We also direct that while passing the denovo order, the observations made by this Tribunal in para 7 of the order dated 06-01- 2012 vide order no. A/121/12/EB/C-II shall be kept in mind by the adjudicating authority with regard to the imposition of penalty in respect of the credit wrongly taken but reversed pertaining to non- excisable goods. Thus, the appeal is allowed by way of remand. 4.9 The impugned order before us is the order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the decision of the Hon'ble CESTAT in the case of M/s.Bombay Dyeing Mfg. Co. Pte. Ltd. Vs. CCE, Mumbai 1999 (113) ELT 331 (Tri.) wherein it is held that 'where assessee is in such knowledge and where the department have no knowledge of the situation, the department can allege suppression of facts............ 22. Whether the assessee are liable to Penalty under Rule 15 of the CCR, 2004, readwith Section 11AC of the Act, in respect of their delinquency on account of non-reversal of proportionate Service Tax credit attributable to their manufactured goods as well traded goods/non-excisable goods: 22.1 As regards to imposition or otherwise, of penalty on the assessee, in respect of the said issue, I find that the assessee is working in a self- assessment regime. Had the department not detected the delinquency on part of the assessee, the same would have caused a loss of revenue to the Govt. exchequer and the assessee would have enriched themselves to that extent. The assessee should have been more vigilant about their tax obligations. Strict compliance of the provisions laid down under tax statutes is expected of the assessees who are working under self- asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of the above rulings of the Apex Court and the fact that the tax delinquency of the assessee stands proved, they cannot be absolved of their statutory liabilities. Resultantly, by adhering to the principles of strict liability, I hold that the assessee is liable for penalty under Section 11AC of CEA, 1944, read with Rule 15(2) of CCR, 2004, for having contravened the provisions of Rule 6 of CCR, 2004, ibid, for the reasons as discussed above. 6.3 Undisputedly in the present case the entire amount was paid by the appellant prior to issuance of the show cause notice as has been recorded. As per para 25.1 of the impugned order, it is observed that the assessee/appellant has deposited an amount of Rs.76,88,567/- against the confirmed demand of Rs.73,56,672/- confirmed by the impugned order. This amount was apportioned by the Commissioner in the impugned order. They have also deposited the interest of Rs.12,13,947/-. All the amounts were deposited prior to issuance of show cause notice. Tribunal has recorded the other facts in its order dated 06.01.2012. In para 8 the Tribunal has recorded as follows:- 8 . The second issue is regarding whether the Cenvat credit availed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the total price excluding sales taxes and other tax attributable to these exempted goods, as stipulated under Rule 6ch of 2004; that an amount of Rs.90,86,941/- has been paid by them on this count, which is more than the demand of Rs.63,67,519/-, attributable to wrongly taken input credit during the period from April 2004 to August 2006; that in view of the above, it is clear that they had no malafide intention to avail irregular credit and that therefore penalty under Section 11AC of the Act, is not imposable on them. 6.5 Commissioner has himself concluded that in the same situation the appellant was acting under a bonafide belief and no malafide intention could have been attributable to them for imposition of penalty under Section 11AC of the Central Excise Act. Then what the Commissioner has held in respect of these demands cannot be sustained. 6.6 Same view has been held by the Tribunal in the order referred to by the learned counsel for the appellant, as reproduced below:- 6. With regard to imposition of penalty under Section 78 ibid, we are convinced with the submissions of the appellant that nonpayment of service tax within the stipulated time frame was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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