M/S. Caparo Engineering India Ltd vs C.C.E. & S.T., Indore

[Arising out of Order-In-Appeal No. IND/CEX/000/APP/223/12 dated: 08.08.2012 passed by CCE Indore]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

1 Whether Press Reporters may be allowed to see 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 of the Order?

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

M/s. Caparo Engineering India Ltd. ...Appellant

Vs.

C.C.E. & S.T., Indore Respondent

Appearance:

Mr. Manish Saharan, (Advocate) for the Respondent

Mr. G R Singh, DR for the Appellants

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing. 09.07.2015

Final Order No. 54099/2015_

Per S. K. Mohanty:

Brief facts of the case are that the appellant is engaged in the manufacture of automobile parts falling under chapter 87 of the Central Excise Tariff Act, 1985. During the period 2007-2008, the appellant imported a plasma cutting machine and the same was received in the factory premises on 01.03.2008. The Additional duty of customs (CVD) paid on the imported goods was taken by the appellant as cenvat credit. Taking of cenvat credit by the appellant was disputed by the Department on the ground that in case of capital goods, the appellant was entitled to take 50% of the Cenvat credit in the year of receipt and the balance 50% in the subsequent years. The discrepancy was noticed by the Audit Wing of the Central Excise Department during their visit to the factory of the appellant. Immediately on receipt of the audit spot memo, the appellant had reversed the cenvat credit along with interest. However, the department proceeded against the appellant to impose penalty for irregularily availed cenvat credit. The SCN issued in this regard culminated in the adjudication order, wherein Rs. 68,461/- was imposed as penalty on the appellant under Rule 15(2) of the Cenvat Credit Rules, 2004, read with Section 11AC of the Central Excise Act, 1944. In appeal, the Ld. Commissioner (Appeals) has upheld the adjudged demand. Hence, the present appeal is before the Tribunal.

2. The Ld. Advocate Sh. Manish Saharan, appearing for the appellant submits that Rule 15(2) of the Cenvat Credit Rules, 2004 can only be invoked, in the eventuality, when there is element of suppression, misstatement, collusion on the part of the appellant to defraud the Government Revenue.

3. Per contra, the Ld. DR appearing for the Revenue reiterated the findings recorded in the impugned order.

4. Heard the Ld. Counsel for both sides.

5. It is and admitted fact that 50% of the cenvat credit has been reversed by the appellant along with interest upon detection of the mistake by the audit wing of the Central Excise department. Since no specific findings have been recorded either in the adjudication order or in the impugned order, establishing the fact regarding clandestine motive of the appellant, in my view, imposition of penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with section 11AC of the Central Excise Act is not justified. Therefore, the impugned order is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in open court)

(S. K. Mohanty) Member(Judicial)

Neha

2 | Page

E/3925/2012