Sam Industries Ltd vs Cce & St, Indore

[Arising out of the OIA No.IND/CEX/000/APP/125/12 dt.27.4.12 passed by the CCE (Appeals), Indore)

Date of Hearing/Decision: 23.2.2015

For Approval & signature:

Honble Mr.Ashok Jindal, 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 would be released under Rule 27 of the 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 Department Authorities? Yes

Sam Industries Ltd. Appellant

Vs.

CCE & ST, Indore Respondent

Appearance

Shri Rohit Choudhary, Advocate- for the appellant

Shri A.K.Dhawan, A.R. - for the respondent

CORAM: Honble Mr.Ashok Jindal, Member (Judicial)

FINAL ORDER NO. 50524/2015

Per Ashok Jindal :

The appellant is in appeal against the impugned order for imposition of penalty under section 11AC of the Act read with Rule 15 of Cenvat Credit Rules, 2004.

2. The brief facts of the case are that the appellant availed inadmissible cenvat credit on capital goods as well as inputs during the period 2005-06 to 2009-10. An audit of accounts was conducted in the month of February  March, 2009 and it was pointed out that they have taken inadmissible cenvat credit which the appellant reversed on 20.03.2009 alongwith interest. Thereafter a show cause notice was issued on 27.12.2010 to the appellant for appropriation of duty amount and for imposition of penalty on the appellant. The matter was adjudicated and the demand proposed in the show cause notice alongwith interest which was paid by the appellant had been appropriated and penalty under section 11AC was also imposed by the lower authorities. Aggrieved with this order, the appellant is before me contested the imposition of penalty.

3. Ld.Counsel for the appellant submits that in this case without invoking the provision of section 11AC, penalty has been sought to be imposed against the appellant which his not permissible in law. Therefore, impugned order quo is for imposition of penalty should be set aside.

4. On the other hand, learned AR for the Revenue supported the impugned order and submits that in this case if audit could not have been conducted, the fact of availing inadmissible cenvat credit could not be detected. Therefore, extended period of limitation has rightly been invoked and penalty has rightly been imposed on the appellant.

5. Heard the parties and considered the submissions.

6. On perusal of the show cause notice, I find that another allegation has been made against the appellant which is reproduced as under:

Since Notice Notice no.1 had never disclosed the fact regarding leasing out of plant/machinery to another person in any of the returns filed with the Department and it was audit team which could detect this irregularity. Hence extended period of limitation, as provided under Section 11A is applicable and invoked in the show cause notice.

Besides since Notice No.2 has knowingly helped in availing wrong credit (which was otherwise not available to the Noticee No.1), he along with Noticee No.1 have rendered themselves liable for penal action in terms of the Cenvat Credit Rules, 2004.

7. On going through the show cause notice, I find that there is no allegation against the appellant of suppression of facts or mis-statement to allege that the appellant has taken inadmissible credit with malafide intention. Only allegation against the appellant is that they have taken inadmissible credit wrongly. In the circumstances, provision of section 11AC cannot be attracted. Consequently, the penalty on the appellant is not imposable although the appellant admitted the duty liability for longer period. In the circumstances, the impugned order quo imposition of penalty is set aside.

8. The appeal is disposed of in the above terms.

(dictated & pronounced in the open court)

(Ashok Jindal)

Member (Judicial)

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