Commissioner Of Central Excise, ... vs Garden Polymers Pvt Ltd

[Arising out of Order-in-Appeal No. 288/2006 CE dated 28/09/2006 passed by the Commissioner of Central Excise (Appeals), Mangalore.]

For approval and signature:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK K ARYA, TECHNICAL 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? No 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

Commissioner of Central Excise, Customs and Service Tax BELGAUM NO. 71, CLUB ROAD, CENTRAL EXCISE BUILDING, BELGAUM, - 590001. KARNATAKA Appellant(s)

Versus

GARDEN POLYMERS PVT LTD 15, LAKAMANAHALLI INDUSTRIAL AREA, DHARWAD Respondent(s)

Appearance:

Mr. Mohd. Yousaf, Addl. Commissioner (AR) For the Appellant

None For the Respondent

Date of Hearing: 21/09/2015

Date of Decision: 21/09/2015

CORAM:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK K ARYA, TECHNICAL MEMBER

Final Order No. 21944 / 2015

Per : ARCHANA WADHWA

Being aggrieved with the order passed by Commissioner (A), Revenue has filed the present appeal. We have heard learned Mr. Mohd. Yousaf, Addl. Commissioner (AR). Nobody appeared for the respondent. The respondent had taken the entire 100% credit of duty-paid on capital goods at the time of receipt of the same whereas they were required to take 50% of the credit only in the first financial year and balance 50% in the next financial year. However, on being pointed out by the Revenue, they reversed the excess credit taken by them. The proceedings were initiated against them for confirmation of interest and imposition of penalty. Commissioner (A) held in favour of the respondent by observing as under:

I find that the arguments adopted in the grounds of appeal have already been considered time and again by Honble Tribunal, Bangalore who have invariably upheld the position that interest and penalty in not imposable when duty is paid before issue of show cause notice. I refer particularly to Final Order No.817-831/2005 of Cestat, Bangalore where an identical stand was taken by the department but which failed to find any favour. The above referred order of Honble Cestat clearly implies that once duty liability is discharged before issue of show cause notice the question of deliberate mala fide cannot be raised. Cestat also considered change in Section 11AB as a result of amendment on 11.5.2001 but did not accept departments stand.

2. Learned DR appearing for the Revenue fairly concedes that as per the Honble High Court of Karnataka in the case of CCE&ST, LTU, Bangalore Vs. Bill Forge Pvt. Ltd. [2012(279) ELT 209 (Kar.) wherein it was held that if credit has been inadvertently taken and stands reversed before utilization, no interest liability would arise against them. Revenue has also not given any reasons as to whether the said credit so availed and reversed was utilized. As such, we find no reasons to interfere with the impugned order of the Commissioner (A). Accordingly, the appeal filed by the Revenue is rejected. (Order pronounced in open court)

ASHOK K ARYA TECHNICAL MEMBER ARCHANA WADHWA JUDICIAL MEMBER

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