Bill Forge Pvt Ltd vs Commissioner Of Central Excise ...

[Arising out of Order-in-Appeal No. 17-2013 dated 04/02/2013 passed by Commissioner of Central Excise , BANGALORE ]

For approval and signature:

HON'BLE SHRI ARCHANA WADHWA, JUDICIAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Bill Forge Pvt Ltd No.9c, Bommasandra Industrial Area BANGALORE DIST - 560099 KARNATAKA Appellant(s)

Versus

Commissioner of Central Excise ,Customs and Service Tax BANGALORE-I POST BOX NO 5400...CR BUILDINGS, BANGALORE, - 560001 KARNATAKA Respondent(s)

Appearance:

Mr. M.A. Narayana,Adv CUSECS CONSULTANTS FLAT 'A'GR.FLOOR, "SEVEN HILLS EXCELLENCY" #33, 2ND CROSS, SBM COLONY, BRINDAVAN NAGAR, MATHIKERE, BANGALORE 560054 For the Appellant

Mr. N. Jagadish, A.R. For the Respondent

Date of Hearing: 03/08/2015

Date of Decision:

CORAM:

HON'BLE SMT ARCHANA WADHWA, JUDICIAL MEMBER

Final Order No. 21871 / 2015

Per : ARCHANA WADHWA

As per facts on record, the appellant is engaged in the manufacture of forged automobile components and were availing the benefit of CENVAT credit of duty paid on various capital goods and input services. The audit was conducted in the appellants factory and it was found that against the invoice dated 16.03.2009, the appellant had taken credit to the extent of Rs 6,85,571-00 whereas the actual credit required to be taken by them was Rs 68,557-00. Similarly in respect of another invoice dated 01.12.2008, the credit availed was Rs 9,61,042-00 whereas the duty paid under the said invoice was Rs 95,841-00. The appellant admitted their mistake that there was an excess availment of CENVAT credit but submitted that it was an inadvertent mistake on the part of the clerical staff responsible for maintaining the records. They submitted that they are taking credit on the basis of around 4000 documents per month and the discrepancy which has happened is on account of placement of decimal in the figures of duty reflected in the invoices. Instead of taking credit of Rs 68,557-00, they have taken credit of Rs 6,85,571-00. Similarly in respect of another invoice, instead of taking the credit of Rs. 93050-00, the credit availed is to the extent of Rs 9,33,050-00 which is simpliciter on account of noting down the wrong figures and it is not attributed to any malafide on their part so as to invite a penal action. As soon as the said discrepancies were pointed out by the audit they accepted their mistake and immediately reversed the credit along with the interest of Rs 3,81,412/-. In these circumstances it is their contention that imposition of penalty upon them is not warranted. On the other hand, learned AR has reiterated the stand of the Revenue and the reasoning adopted by the lower authorities. He submits that if the audit would not have pointed out the said mistake, the fact of excessive availment of credit would have gone unnoticed.

2. Admittedly penalty is to be imposed in case an assessee acts with malafide intention and in a deliberate and contemptuous conduct. No doubt appellant had taken excess credit but the explanation offered by them is that this is on account of inadvertent mistake on the part of clerk responsible for maintaining records inasmuch as the same has occurred on account of change of place of the decimal in the figures of the credit. The appellants have paid interest to the extent of Rs 3,81,412/-; which is penal in character. The observations of Commissioner (Appeals) that if not pointed out by the audit, the same would have gone unnoticed, do not attribute to the allegation of malafide to the appellant. In the absence of any evidence to show that there was malafide on the part of the assessee, I find that there is no justification for imposition of penalty upon the assessee. The appellants have also pleaded that they are dealing with about 4000 documents in a month and the mistakes in respect of two documents throughout the year cannot be called as willful malafide mistake. This seems to be a human error without any deliberate intention to avail excess credit. As such, I set aside the penalty imposed upon the appellant and allow the appeal to that extent.

(Order pronounced in open court )

ARCHANA WADHWA JUDICIAL MEMBER

pnr

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