Annu Industries vs Commissioner Of Central Excise & ...

[Arising out of Order-in-Appeal No. AV(16) 305/2014 dtd. 29/1/2014 passed by the Commissioner(Appeals) of Central Excise & Customs, Aurangabad]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

=======================================================

1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

Annu Industries : Appellants

VS

Commissioner of Central Excise & Customs, Aurangabad : Respondent

Appearance

None for the Appellants Shri. V.K. Shastri, Asstt. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 15/5/2015 Date of decision: 15/5/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in-Appeal No. AV(16) 305/2014 dtd. 29/1/2014 passed by the Commissioner(Appeals) of Central Excise & Customs, Aurangabad, wherein appeal of the appellant was rejected. The fact of the case is that appellant are engaged in the manufacture of excisable goods viz. Motor Vehicle Part falling under Chapter Subheading No. 87141900 of the First Schedule of the Central Excise Tariff Act, 1985. The appellant has availed inadmissible credit of Rs. 2,55,333/- of basic custom duty, education cess, and higher education cess paid on imported machinery in terms of Rule 3 of Cenvat credit Rule, 2004. Said duties are not specified for availing Cenvat Credit. A credit of Rs. 25,192/- was availed on capital goods viz. Steel Purlins & Profile Sheets falling under Chapter subheading 7212 and 7210 of the Central Excise Tariff Act, 1985 as the same are not covered as capital goods as defined under Rule 2(a) of Cenvat Credit Rules, 2002. Thus total inadmissible credit of Rs. 2,80,525/- was disallowed by the original authority and demanded interest of Rs. 65,707/- and penalty of Rs. 2,80,525/- under Section 11AC. The Cenvat amount of Rs. 2,80,525/- was immediately paid by the appellant on pointing out by the department on 14/5/2012 i.e. before the issuance of show cause notice. Aggrieved by the said order , appellant filed appeal before the Commissioner(Appeals) who vide impugned order rejected the appeal therefore appellant is before me.

2. When the matter was called for hearing none appeared on behalf of the appellant nor any request for adjournment is on record, therefore I am taking up the matter to decide on merit.

3. Shri. V. K. Shastri, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.

4. On careful consideration of the submission made by Ld. A.R. and perusal of record and written submission made by appellant. I find that the appellant in his appeal seeking relief only for waiver of interest and penalty and there is no contest on the demand of Cenvat amount. Front the facts of the case I find that appellant have availed Cenvat credit admittedly which was inadmissible, however on pointing out by the department they have immediately paid the amount of Cenvat credit, however they have not paid interest. As per their submission interest is not chargeable for the reason that though the credit was taken but same was not untilized and therefore interest cannot be charged. I do not agree with this submission of the appellant for the reason that as per Honble Supreme Court judgment in the case of Union of India Vs. Ind-Swift Laboratories Ltd. [2011(265) E.L.T. 3(S.C.). interest is chargeable right from the date of availing Cenvat credit in the Cenvat account and not from the date of utilization. In view of the said Apex Court judgment interest is payable on the Cenvat credit amount which comes to Rs. 65,707/- as confirmed by original authority. As regard imposition of penalty of equal amount of duty under Section 11AC, I am of the view that firstly appellant has taken this credit inadvertently. On pointed out by the department they immediately paid this amount without any contest. Looking to the conduct of the appellant, malafide can not be attributed. The appellant paid entire amount of Cenvat credit before issuance of show cause notice. Therefore, I am of the view that appellant has made out a fit case for waiver of penalty imposed under Section 11AC. In view of my above discussion I pass following order.

(a) Demand of Cenvat credit of Rs. 2,80,525/- is upheld.

(b) Interest of Rs. 65,707 confirmed under Section 11AB is upheld.

(c) Penalty of Rs. 2,80,525/- imposed under Section 11AC is dropped.

Appeal is dispose in above terms.

(Dictated in court)

Ramesh Nair Member (Judicial)

sk

2