9911796707
TMI Blog2008 (5) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... availed Cenvat credit to the tune of Rs. 1,89,912/- during the period October, 2002 to December, 2003. They reversed the inadmissible credit before Show Cause Notice was issued to recover the same. After due process of law, vide order dated 30-11-04, the original authority imposed a penalty of Rs. 17,746/- on PML in terms of Rule 13 of Cenvat Credit Rules, 2002 (CCR). He demanded interest of Rs. 17,746/- as proposed in the show cause notice. In the impugned order, the Commissioner vacated the demand of interest as well as the penalty imposed on PML. He found that in view of the Apex Court's decision in Rashtriya Ispat Nigam Ltd. v. Commissioner [2003 (161) E.L.T. 285(T)] the settled position as regards the demand of interest and imposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instance of the department. The payment was not voluntary and therefore reliance by the Commissioner on the ratio of Rastriya Ispat Nigam Ltd. case was misplaced. The leniency shown by the lower appellate authority encouraged unauthorized removal of excisable goods and emboldened unscrupulous assessees to indulge in activities contrary to law. Blanket protection could not be extended from penalty in cases where duty was paid before the issue of show cause notice. 3. The authorized representative of the respondents submits that the excess credit of above Rs. 1.89 lakhs was wrongly availed by PML owing to system error. Once the error came to their notice, the wrong credit was reversed even before the issue of show cause notice. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the lower authorities imposing equal amount of penalty. Assessee relied on the following decisions. In CCE v. Multiserve Rolls Ltd., reported in 2007 (215) E.L.T. 119 (Tri.-Kol.), a case where Modvat credit was wrongly availed but not utilized, the Tribunal upheld waiver of penalty imposed. In Bhiwani Textile Mills Ltd. v. CCE, New Delhi reported in 2003 (151) E.L.T. 365 (Tri.-Del.), it was held that mandatory penalty could not be imposed for wrong availment of Modvat credit. 5. The Apex Court in Rashtriya Ispat Nigam Ltd. case, upheld non-imposition of penalty and waiver of interest where the duty not paid was paid before issue of show cause notice. In the instant case, there is nothing on record to disbelieve the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to have been paid under this Act." The Section covers cases of short payment/non-payment of duty or erroneous refund determined under Section 11A or ascertained by the assessee, and made good with delay. In the instant case, the assessee did not utilize the excess credit availed as they always had about Rs. Three lakhs in their RG23A account during the material period. In the instant case therefore, there was no financial accommodation enjoyed by the appellant which had to be paid back to Revenue along with compensation in the form of interest. Therefore, there is no justification in demanding interest from the assessee. I find that the lower appellate authority rightly vacated the penalty imposed on the assessee and the demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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