Ms Priyanka Saini, Advocate For The vs Shri R K Mishra, Ar For The
- CitationExcise Appeal No. 57846 of 2013-Ex (SM)
Ratio decidendi
The rule this decision rests on
The allegation of suppression of facts cannot be sustained where the assessee's taking of inadmissible Cenvat credit was the product of a bona fide, mistaken understanding that it was entitled to such credit, and the assessee was not shown to have known of the impropriety; in such circumstances the penalty for suppression is set aside. Interest on the confirmed demand is payable where the assessee lacked sufficient balance in its Cenvat credit account to discharge the demand at the time the credit was wrongly taken, so that the assessee is directed to pay interest within a fixed period, failing which a penalty equal to the amount of interest is to be imposed.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-In-Appeal No. 106/CE/Appl/CHD-II/2013 dated 18.03.2013 passed by Commissioner of Central Excise (Appeals) Chandigarh]
For approval and signature:
Honble Mr 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?
Surya Pharmaceuticals Ltd. Appelalnts
Vs.
Commissioner of Central Excise Respondent
ST, Chandigarh
Appearance:
Ms Priyanka Saini, Advocate for the Appellants
Shri R K Mishra, AR for the Respondent
CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial)
Date of Hearing /decision: 24.02.2015
ORDER NO. FO/ A 50587 /2015-Ex(SM)
Per Ashok Jindal :
The appellant is in appeal against the impugned order seeking setting aside of the order of demand, interest and imposition of penalty on the appellant.
2. Brief facts of the case are that appellant is manufacturer of bulk drug. They have procured certain inputs from 100% EOU and taken the Cenvat credit of the duty paid by 100% EOU as the appellant is entitled to take Cenvat credit only on the CVD and not on basic excise duty, therefore they have availed excess Cenvat credit which was not admissible to them. During the period August, 2009 to November 2009, the audit was conducted, where it was found that appellant has taken excess credit wrongly. Therefore, on pointing out by the audit team, they also reversed the Cenvat credit in two installments, some part before issuance of show cause notice and some part after the issuance of show cause notice. The show cause notice was issued to demand inadmissible Cenvat credit and invoking the extended period of limitation along with interest and imposition of penalty.
3. Both the lower authorities confirmed the demand as proposed in the show cause notice along with interest and imposed penalty on the appellant equivalent to the duty. The appellant is before me seeking setting aside of the order qua demand of interest and imposition of penalty.
4. Heard the parties.
5. In this case, the allegation against the appellant is as under:-
6. The contention of the appellant is that they are not aware of the fact that they are not entitled to take Cenvat credit on CVD and not on basic excise duty. Therefore, they have taken the Cenvat credit wrongly and it is also alleged in the show cause notice that they have taken inadmissible Cenvat credit. In these circumstances, the allegation of suppression is not sustainable. Therefore, I set aside the penalty imposed on the appellant .
7. Further, as contended by the learned AR that as appellant have not sufficient balance in their Cenvat credit.
8. On perusal of the record, I find that in October, 2008, the appellant was not having sufficient balance to meet the demand confirmed in the impugned order. Therefore, I direct the appellant to make the payment of interest within 30 days of the communication of this order failing which the appellant shall be penalized for equal amount of penalty.
8. In these circumstances, appeal is disposed of.
(dictated and pronounced in the open court )
( Ashok Jindal ) Member(Judicial)
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