M/S. Beml Limited vs Commissioner Of Central Excise, ...

[Arising out of Order-in-Appeal No. 46/2012 dated 05/03/2012 passed by the Commissioner of Central Excise (Appeals-I), Bangalore. ]

For approval and signature:

HON'BLE SMT. 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? 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

M/s. BEML Limited BEML NAGAR, KGF 563115 Appellant(s)

Versus

Commissioner of Central Excise, Customs and Service Tax BANGALORE-I POST BOX NO 5400, CR BUILDINGS, BANGALORE  560 001. KARNATAKA Respondent(s)

Appearance:

Mr. Raghavendra.B Advocate LAKSHMI KUMARAN & SRIDHARAN WORLD TRADE CENTRE NO.404-406, 4TH FLOOR, SOUTH WING BRIGADE GATEWAY CAMPUS NO.26/1, DR. RAJKUMAR ROAD, BANGALORE - 560 055. KARNATAKA For the Appellant

Mr. S. Ilangovan, Dy. Commissioner (AR) For the Respondent

Date of Hearing: 19/06/2015

Date of Decision: 19/06/2015

CORAM:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER

Final Order No. 21388 / 2015

Per : ARCHANA WADHWA

The appellants are engaged in the manufacture of dutiable final products as also exempted final products. At the time of clearance of exempted final products, they were reversing the proportionate CENVAT credit availed on common inputs and common input services. However, said reversal was not undertaken by them in respect of gas, iron and inward transportation.

2. Based upon the same, proceedings were initiated against the appellant by way of issuance of show-cause notice on 7.12.2009 proposing to confirm demand of Rs.2,02,493/-, in terms of provisions of Rule 6(3) of CENVAT Credit Rules, for the period July 2005 to February 2007 i.e., by invoking the longer period of limitation.

3. The contention of the learned advocate is that they have reversed the proportionate credit in respect of all the major inputs and non-reversal of the credit to the smaller extent in respect of oil, gas and inward transportation was on account of their bona fide mistake. They were filing the returns with the Revenue and audits have also taken place during the period in question but the said lapse on their part was never pointed out. As such, he submits that the benefit of limitation should be extended to them inasmuch as there was no malafide on their part.

4. After hearing learned DR, I find that Commissioner (A) has dropped the penalty by observing as under:

I find that the appellant company is a public sector unit which has cleared the goods to Defence. There is no reason to doubt the bonafides of the appellant to evade duty. Considering the facts & circumstances of the case and the fact that there was different opinions on the issue and the issue finally resolved by issue of letter dated 27.10.2009 by the Board. I hereby provide relief of penalty imposed under the provisions of Section 11AC of Central Excise Act, 1944 and confirm the duty along with the interest.

The said part of the impugned order of Commissioner (A) dropping the penalty does not stand challenged by the Revenue and as such has attained finality. Inasmuch as the appellate authority has observed that there is no mala fide on the part of the assessee, I find that invocation of longer period is not justified on the said ground itself. It is well settled law the circumstances for invocation of longer period and for imposition of penalties on an assessee are identical. Once the bona fide of the appellants are not being doubted for the purpose of imposition of penalty, the same cannot be doubted for the purpose of invocation of longer period. As such, I agree with the learned advocate that extended period cannot be invoked against them. On this ground itself I set aside the impugned order and allow the appeal with consequential relief to the appellant. (Order pronounced in open court)

ARCHANA WADHWA JUDICIAL MEMBER rv 3