M/S Kudos Chemie Limited vs Cce & St Chandigarh-Ii

[Arising out of Order-In-Appeal No. 94/CE/Appeal/CHD-II/2013 dated 08.03.2013 passed by CCE (Appeals) Chandigarh]

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 Kudos Chemie Limited ...Appellant(s)

Vs.

CCE & ST Chandigarh-II Respondent(s)

Appearance:

Mr. Gagan Kohli (Advocate) for the Appellant

Mr. G R Singh DR for the Respondent

CORAM:

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

Date of Hearing/ Decision. 17.09.2015

Final Order No. 52930 /2015_

Per S K Mohanty:

This appeal is directed against the impugned order dated 15.03.2015 passed by the Commissioner (Appeals), Central Excise,Chandigarh-II, wherein penalty imposed under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act in the adjudication order dated 04.04.2012 has been upheld.

1.1 The brief facts of the case are that during the disputed period, the appellant took cenvat credit on the inputs and capital goods inadvertently, which on detection of the mistake by the Audit Wing, was reversed and the reversal particulars were duly intimated to the Central Excise Department. The appellant submits that before issuance of SCN, the entire amount of irregular cenvat credit along with interest has been paid and subsequent to payment of such amount, the Department initiated Show Cause Proceedings for confirmation of the cenvat demand and for imposition of penalty. The appellant further submits that since the amount representing the irregular cenvat credit and interest thereof have been paid before issuance of the SCN, the appellant should get the benefit of Section 11A(2B) of the Central Excise Act 1994, according to which no notice shall be issued for imposition of penalty and further the proceedings have to be closed for all practical and statistical purposes.

2. I have heard the Ld. Counsel for both the sides and perused the records.

3. I find that taking of irregular cenvat credit and subsequent reversal thereof in the circumstances of the present case is not attributable to the situation involving suppression, misstatement etc., in view of the fact that the appellant had sufficient balance in its cenvat account to take care the deficiency. Since, the appellant has reversed the irregularly availed cenvat credit and paid the interest therein, I am of the considered view that the appellant should get the benefit of the provisions of Section 11A(2B) of the Central Excise Act, for non imposition of penalty.

4. In view of above, I do not find any merits in the impugned order passed by the Commissioner (Appeals), and as such, the same 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

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