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2016 (9) TMI 578 - CESTAT HYDERABADRecovery of interest and imposition of penalty - Rule 15 CCR r/w 11AC of the Central Excise, Act, 1944 - irregular avilment of Cenvat credit - availment of 100% credit on capital goods in the first year - Held that:- it is correct that there is no determination of duty in the order passed by the adjudicating authority. This is because, though the appellants had wrongly availed 100% credit on capital goods in the same financial year, which is contrary to the provision of Cenvat Credit Rule, 2004, they would have been eligible for credit in the subsequent year. Thus, the demand raised in show cause notice is only for interest which is already paid by the appellant. When the show cause notice itself is for demand of interest only and no determination of duty, the adjudicating authority has confirmed the proposed penalty of equal amount. When there is no evidence to establish that wrong availment of credit was intentional and a determination of duty for the said act of commission or ommission on the part of appellant, the penalty imposed is not sustainable. In this case, there was no demand of duty as the appellant was eligible for 50% credit in the subsequent year. There is no fraud or suppression of facts brought out with intent to evade payment of duty. Therefore, in the absence of determination of duty, the question of penalty under section 11AC does not arise at all. - Decided partly in favour of appellant
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