M/S. Vishesh Enterprises vs Commissioner Of Central Excise, ...

[Arising out of Order-in- Appeal No. SB(41) 41/M.V./2010 dtd. 28/4/2010 passed by the Commissioner(Appeals), Central Excise, Mumbai Zone-I]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No 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 : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. Vishesh Enterprises : Appellants

VS

Commissioner of Central Excise, Mumbai-V : Respondent

Appearance

None for the Appellants Shri. H.M. Dixit, Asstt. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 17/2/2016 Date of decision: /2016

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in- Appeal No. SB(41) 41/M.V./2010 dtd. 28/4/2010 passed by the Commissioner(Appeals), Central Excise, Mumbai Zone-I wherein Ld. Commissioner upheld the Order-in-Original dated 31/10/2008 and rejected the appeal of the appellant.

2. The fact of the case is that the appellant have availed Cenvat credit in respect of capital goods on which they also have claimed depreciation therefore it was alleged in the show cause notice that appellant is not entitle for the credit in terms of Rule 4(4) of Cenvat Credit Rules, 2004. In the Adjudication, following order was passed:

23. In view of the above discussions and findings I pass the following order:

1) I confirm the demand of an amount of Cenvat credit wrongly availed on Capital Goods amounting to Rs. 7091/-(Rupees seven thousand ninety one only) under proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944.

2) I order the recovery of interest on the said amount of Cenvat credit wrongly availed on Capital goods amounting to Rs. 7091/- as shown above under Section 11AB of the Central Excise Act, 1944.

3) I confirm the demand of recovery of interest on Cenvat credit wrongly availed on Capital goods, amounting to Rs. 54206/-(Rupees Fifty Four thousand two hundred six only) under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944.

4) I impose penalty of Rs. 459357/- (Rupees four lakhs fifty nine thousand three hundred fifty seven only) on M/s. Vishesh Enterprises under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944.

Being aggrieved by the Order-in-Original, appellant filed appeal before the Commissioner(Appeals) who upheld the Order in Original and rejected the appeal therefore appellant is before me.

3. None appeared on behalf of the appellant, it was observed that this matter was listed earlier on various dates i.e. 14/10/15, 16/11/15 and 18/12/15. On these dates neither anybody appeared nor any request for adjournment was made. Today also when the matter was called, none appeared, this shows that the appellant is not interested in pursuing their case, I therefore have no option except to proceed to decide the appeal on merit.

4. Shri. H.M. Dixit, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that claim of the appellant that they have reversed the depreciation does not hold water for the reason that once the depreciation has been claimed, the Cenvat Credit is not admissible in terms of Rule 4(4) of CCR, 2004.

5. I have carefully considered the submission made by Ld. A.R. and perused the record.

6. I find that limited issue involved in the case is that whether the appellant is entitled for Cenvat credit on Capital goods when Cenvat credit availed as well as claimed depreciation. However, subsequently they also reversed the Cenvat credit and reversed the depreciation by issuing voucher. It is the claim of the appellant that claim of the depreciation has not been effected in the balance sheet as the same was reversed by them. I find that the Adjudicating authority has not properly examined the facts that whether depreciation initially claimed by the appellant have been reversed and finally not claimed in their balance sheet. If the depreciation has not been claimed in the balance sheet even though initially it was claimed, Cenvat Credit cannot be denied. However it appears from the order that this aspect has not been examined by the Adjudicating Authority. As regard the imposition of penalty, I find that not only in the show cause notice but in the Adjudication order also demand confirmed under Section 11A for an amount of Rs. 7,091/- whereas penalty under Section 11AC was imposed for an amount of Rs. 4,49,357/-. Penalty under Section 11AC can only be imposed when the duty demand is determined under Section 11A(1). In the present case the duty determined under Section 11A(1) is limited to Rs. 7,091/- therefore penalty over and above this amount is not sustainable as the same is not corresponding to any amount of duty determined under Section 11A(1). However issue of admissibility of Cenvat credit is yet to be decided by the Adjudicating authority. In view of my above observations penalty if at all, is imposable it is to be commensurate to the duty if any confirmed. In view of my above discussion, I am of the considered view that this matter needs to be remanded. I therefore remand the matter to the Original Adjudicating authority to pass a denovo Adjudication order, taking in to consideration my above observations. Appeal is disposed of by way of remand.

(Order pronounced in court on ______________)

Ramesh Nair Member (Judicial)

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