United Telecoms Ltd vs Commissioner Of Central Excise, ...

[Arising out of Order-in-Appeal No. 179/2011-CE dated 17/07/2012 passed by the Commissioner of Central Excise (Appeals-II), Bangalore.]

For approval and signature:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should 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 Departmental authorities? Yes

UNITED TELECOMS LTD 18A/19, DIDDANAKUNDI INDUSTRAIL AREA, MAHADEVAPURA POST, BANGALORE Appellant(s)

Versus

Commissioner of Central Excise, Customs and Service Tax BANGALORE-I POST BOX NO 5400, CR BUILDINGS, BANGALORE  560 001. KARNATAKA Respondent(s)

Appearance:

Mr. B.N GURURAJ, Advocate 22/2, 3RD MAIN ROAD CHAMARAJPET, BANGALORE.

KARNATAKA For the Appellant

Mr. N. Jagadish, Superintendent (AR) For the Respondent

Date of Hearing: 01/05/2015

Date of Decision: 01/05/2015

CORAM:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER

Final Order No. 21203 / 2015

Per : ARCHANA WADHWA

The appellant who is engaged in the manufacture of assembled PCB card, SMPS power supply, etc., received the inputs and availed the credit to the extent of Rs.12,56,449/-. However, the said inputs were cleared as such vide invoice dated 30.3.2009 to M/s. Valere Power India Pvt. Ltd. at a value lower than the value of the goods paid by them and reversed a credit of Rs.4,48,465/-.

2. Revenue entertained a view that they are required to reverse the entire CENVAT credit so availed by them inasmuch as the inputs were cleared as such from their factory. On being pointed out by the Revenue, the appellant paid the differential duty of Rs.8,07,984/- along with interest of Rs.74,534/- vide challan dated 29.12.2009.

3. In the above background, proceedings were initiated against the appellant for confirmation of demand and interest as also for imposition of penalty. The said proceedings stand culminated into an order passed by the original adjudicating authority and upheld by Commissioner (A).

Hence the present appeal.

4. The challenge in the present appeal is only to imposition of penalty imposed under Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. The appellant stand is that such less payment of duty was not on account of any mala fide intention but was based upon their view that the credit has to be reversed proportionate to the assessable value at which the goods were being sold. The appellant deposited the differential amount as soon as the Revenue pointed out to the same. The amount was deposited along with interest and as such, there was no requirement to issue the show-cause notice for imposition of penalty in terms of Section 11A(2B) of the Central Excise Act. Otherwise also, they have reflected the entire transactions in their statutory records and particulars were specified in the ER1 returns, in which case no mala fide can be attributed to them.

4. After hearing both the sides, I find that inasmuch as the appellant had reflected the entire transaction in their records, it cannot be said that there was any mala fide intention on their part to evade payment of duty. Such an activity cannot be held to be a clandestine activity so as to attract the penal provisions. Otherwise also, the appellant deposited the entire differential duty along with interest prior to issuance of show-cause notice, in which case, as rightly argued by the learned advocate, there was no requirement of issuance of show-cause notice in terms of Section 11A(2B) of the Central Excise Act, 1944.

4.1 In view of the above, I set aside the penalty imposed upon the appellant and allow their appeal to that extent.

(Order pronounced in open court)

ARCHANA WADHWA JUDICIAL MEMBER

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