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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2011 (8) TMI AT This

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2011 (8) TMI 984 - AT - Central Excise


Issues:
- Waiver of pre-deposit and stay of recovery sought by the appellant in relation to duty and penalty imposed for irregular utilization of CENVAT credit.
- Imposition of mandatory penalties under Section 11AC and Rule 15(2) of the CENVAT Credit Rules, 2004.

Analysis:
The appellant filed an application seeking waiver of pre-deposit and stay of recovery concerning a duty of Rs. 4,93,408/- and an equal penalty amount. The duty comprised two parts: Rs. 3,23,643/- for the period from November 2008 to May 2009 and Rs. 1,69,765/- for a subsequent period. The appellant had paid the first part of the duty with interest in June and July 2009, which was appropriated towards the demand. However, they utilized CENVAT credit beyond the permissible period, leading to the demand for the second part of the duty. Penalties were imposed under Section 11AC and Rule 15(2) of the CENVAT Credit Rules, 2004, against which the appeal and stay application were primarily directed.

Upon hearing both parties, the judge found no prima facie case for the appellant against either penalty. The appellant had misrepresented the payment of duty in their returns for the period from November 2008 to May 2009, indicating a crucial misrepresentation with intent to evade duty payment. Additionally, irregular utilization of CENVAT credit after May 2009 was established, leading to the imposition of penalties under relevant rules. The misrepresentation in returns and wrongful utilization of CENVAT credit were deemed intentional acts to evade duty payment, justifying the penalties imposed.

The appellant did not cite financial hardships in their application, although leniency was requested through their counsel. Considering all aspects of the case, the judge directed the appellant to pre-deposit Rs. 3,00,000/- within four weeks under Section 35F of the Central Excise Act, with compliance to be reported by a specified date. Upon compliance, waiver of pre-deposit and stay of recovery was granted for the remaining amount, subject to the specified conditions.

In conclusion, the judgment upheld the penalties imposed on the appellant for misrepresentation and irregular utilization of CENVAT credit, while also providing a directive for pre-deposit and stay of recovery based on the appellant's compliance with the specified conditions.

 

 

 

 

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