M/S Garden Silk Mills Ltd vs Commissioners Of Central Excise, ...

[ Arising out of OIA-CCEA-SRT-I-SSP-262-2013-14-U-S-85 dtd 24.7.2013 Passed by the Commissioners of Central Excise, Customs and Service Tax-SURAT-I ]

M/s Garden Silk Mills Ltd - Appellant(s)

Vs

Commissioners of Central Excise, Customs and Service Tax-SURAT-I - Respondent (s)

Represented by:

Assessee : Shri W Christian (Learned Advocate) Revenue : Shri G P Thomas (Authorised Representative)

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial)

1 Whether Press Reporter 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 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

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial)

Date of Hearing / Decision : 27/2/2015

ORDER No. A/10424 / 2015dtd 27/2/2015

Per : Mr.P.K. Das,

The applicant filed this application for early hearing of the appeal. I find that the issue lies in a narrow compass and therefore the appeal is taken up for hearing.

2. After hearing both the sides and on perusal of the records, I find that the appellant is contesting the imposition of penalty of Rs 5,00,000/- under Rule 15(1) of Cenvat Credit 2004.

3. The Learned Advocate for the appellant submits that the dispute relates to eligibility of Cenvat Credit on GTA Service upto customers premises for the period April 2011  November 2011. The Learned Advocate submits that the Larger Bench of the Tribunal in the case of ABB Ltd  2009(15)STR.23 (Tri.LB) held that the Cenvat Credit is admissible on GTA Service upto the customers premises. It is submitted that the Honble High Court of Karnataka in the case of CCE&ST vs ABB Ltd  2011(23)STR.97(Kar.) held that credit is eligible upto 1.4.2008. In the present case, the appellant availed the credit on the basis of the decision of the Larger Bench of the Tribunal and after the decision of the Honble High Court, they reversed the Credit before passing of the adjudication order. So, imposition of penalty is not warranted.

4. On the other hand that the Learned Advocate for Revenue reiterates the findings of the Commissioner (Appeals). He submits that the appellant had not disclosed the availment of cenvat credit in their return. He submits that the wrong availment of cenvat credit was come into to the knowledge of Dept. during the scrutiny of the records.

5. I find that the appellant is not contesting the demand of duty alongwith interest. The dispute relates to imposition of penalty. The contention of the appellant is that they have taken credit on the basis of the Larger Bench decision. The Honble Karnataka High Court has restricted the credit upto March 2008 and the period after the decision of the Honble High Court the appellant reversed the credit. I find that in any event, there is contravention of Rule as well as the appellant availed credit after the decision of the Honble Karnataka High Court in the case of ABB Ltd. Therefore, there is some force in the submission of the Learned Authorised Representative for the Revenue. However, considering overall facts and circumstances of the case, in my view, the quantum of penalty is excessive.

6. In view of the above discussion, the impugned order is modified to the extent the penalty is reduced to Rs 75,000/- (Rupees seventy-five thousand only). The appeal is disposed of in the above terms. Early Hearing application is disposed of.

(Dictated and pronounced in the Court)

(P.K. Das) Member (Judicial)

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