M/S. Paramount Communication Ltd vs C.C.E. & S.T. Jaipur-I

[Arising out of Order-in-Appeal No. 181-VC-CE-JPR-1-2013 dated 17.12.2013 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Jaipur].

For approval and signature:

Honble Shri Ashok Jindal, 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. Paramount Communication Ltd. .Appellants

Vs.

C.C.E. & S.T. Jaipur-I .Respondent

Appearance:

Shri Bipin Garg, Advocate for the Appellant

Shri G.R. Singh, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 24.06.2015

FINAL ORDER NO. 52023/2015-EX(SM)

Per Ashok Jindal:

Appellant is in appeal against the impugned order contesting the demand of interest and imposition of penalty.

2. The facts of the case are that appellant is a manufacturer of dutiable as well as exempted final product and are not maintaining separate account for input / input services which are being used in manufacturing of dutiable as well as exempted final product. During the course of audit it was also revealed that the appellant has taken the Cenvat Credit of Rs.9603/- twice. As the appellant were not maintaining separate account for input / input services as per Rule 6(2) of Cenvat Credit Rules 2004 as they are required to pay 10% of the value of exempted goods to the Department which they failed to do so. In these circumstances, proceedings were initiated against the appellant by way of issuance of show cause notice demanding the amount of 10% of the value of exempted goods along with interest and equivalent amount of penalty was also proposed. The Cenvat Credit availed twice was also sought to be denied. Before the issuance of the show cause notice the appellant paid the amount of 10% of the value of exempted final product and reverse inadmissible Cenvat Credit. After adjudication the adjudicating authority appropriated the amount of duty already paid by the appellant and also confirmed the demand of interest for intervening period and impose equivalent amount of penalty. On appeal before the Ld. Commissioner (A) the demand of interest was confirmed, penalty was reduced to 25% of the duty involved. Aggrieved from the said order appellant is before me praying that interest is not payable as per the decision of Honble High Court of Karnataka in the case of Bill Forge Pvt. Ltd. Vs. CCE Banglore-2012 (279) ELT 209 (Kar). He also prayed that penalty under section 11AC is not imposable on the appellant as appellant was under bonafide belief that they are not required to pay 10% of the value of exempted product and they have taken inadmissible credit wrongly.

3. Heard the Ld. Counsel.

4. It is the contention of the Ld. Counsel that during the intervening period they were having sufficient balance in their Cenvat Credit account to meet the liability of duty confirmed by way of adjudication order. If it is so then interest is not payable by the appellant as held by the Honble High Court of Karnataka in the case of Bill Forge Pvt. Ltd. (Supra). Therefore, demand and interest is set aside. The contention of the appellant that they have not paid the amount of 10% of the value of exempted final product and taken Cenvat Credit twice wrongly under bonafide belief is not acceptable as appellant are manufacturing excisable goods and when they are clearing exempted final product from their factory they are required to pay 10% of the value of the said goods. These provisions are very clear. Therefore, penalty under section 11AC is rightly imposed on the appellant and same has been reduced by the Ld. Commissioner to the extent of 25% of the duty as they have paid the entire amount of duty before issuance of show cause notice.

5. In these circumstances, appeal is partly allowed.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

2

E/51729/2014-EX(SM)