Commissioner Of Central Excise, Thane I vs Hindustan Coca Cola Beverages P. Ltd

(Arising out Order-in-Appeal No. VSK/1/TH-I/2010 dated 08.1.2010 passed by the Commissioner of Central Excise (Appeals), Mumbai)

For approval and signature: Honble Mr. M.V. Ravindran, 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 No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

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

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

Commissioner of Central Excise, Thane I Appellant

Vs.

Hindustan Coca Cola Beverages P. Ltd. Respondent

Appearance:

Shri H.M. Dikshit, AC (AR) for the appellant Shri Jitendra Motwani, Advocate for the respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial)

Date of hearing : 18.03.2015 Date of decision : 18.03.2015

O R D E R No:..

This appeal is filed by the Revenue against Order-in-Appeal No. VSK/1/TH-I/2010 dated 08.1.2010.

2. Heard both sides and perused the record.

3. The issue involved in this case is regarding the equivalent amount of penalty to be imposed on the respondent assessee for availment of ineligible Cenvat credit of `2,88580/-. The Adjudicating Authority as well as first appellate authority has held that the appellant has availed ineligible Cenvat credit but has reversed the same along with interest.

4. Ld. DR submits that first appellate authority is wrong in passing the impugned order and submits that the issue involved in this case is regarding availment of ineligible Cenvat credit on the capital goods on which the depreciation was claimed as also Cenvat credit. He submits that if this would not have been noticed by the audit it would have gone unnoticed; hence suppression of fact was invoked. Adjudicating Authority has wrongly imposed lesser penalty under Section 11AC of Central Excise Act, 1944 which should have been equivalent to the amount of Cenvat credit disallowed.

5. Ld. counsel for the respondent contends that the first appellate authority has clearly recorded that the availment of Cenvat credit was mere contravention and was not with an intention to evade duty. He would submit that the provisions of Section 11AC during the relevant period had an option to pay 25% of the amount of the duty liability confirmed by the Adjudicating Authority, if the option is extended by the Adjudicating Authority. He would submit that in the case in hand, the Adjudicating Authority has not extended such an option.

6. On perusal of the records, I find that the first appellate authority while upholding the Order-in-Original wherein penalty of `75000/- has been imposed on the appellant, has recorded the following finding:-

10. I have examined the facts of the case. The original Adjudicating Authority in his order has recorded a finding that while there was contravention, there was no evidence to show that the contravention of the rules was with an intend to evade duty. This principle has been upheld by the Hon'ble Supreme Court in the case of UOI vs. Rajasthan Spinning & Weaving Mills (Civil Appeal no. 3527 of 2009). The Hon'ble Supreme Court has opined that while imposing mandatory penalty it is not enough to establish that there has been a contravention of Rules but it must also be demonstrated that this contravention was with an intent to evade duty. Therefore, I find no reason to interfere with the order of the original Adjudicating Authority. I therefore pass the following order.

7. As against the above recorded factual matrix, I find the department has not brought on record the anything to controvert the same. I do find that the ratio of the Apex Court in Rajasthan Spinning & Weaving Mills 2009 (238) ELT 3 (SC) indicates that the mandatory penalty under Section 11AC of the Act can be imposed only if it is demonstrated that such contravention was with intent to evade duty and ingredients of Section 11A of Central Excise Act, 1944 are present. As against the factual finding there being no evidence to controvert the said finding as to there was intent to evade duty; I find the impugned order is correct and legal and does not suffer from any infirmity.

8. In view of the foregoing, the impugned order is upheld and appeal is rejected as devoid of merits.

(Pronounced in Court)

(M.V. Ravindran) Member (Judicial)

//SR

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