TMI Blog2016 (1) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted search in the premises of respondent. Thus search was before scrutiny of returns. The notice was issued to the appellant not on basis of the returns filed by the respondent. It is for this reason that Commissioner (Appeals) has observed that the department could have conducted scrutiny of the returns which disclosed the reversal of credit and called for details from the respondent. That the mistake ought to have been pointed out to the respondent even before search and SCN as the mistake is only a remedial mistake. In spite of the search conducted in the premises and verification of records done by the Anti-Evasion Wing of the Department, no case has been alleged against the respondent that the respondent availed wrong credit or that the respondent availed irregular credit with intent to evade payment of duty. This can only point to the conclusion that the credit availed by the respondent and the returns filed are proper and do not contain any discrepancy. Non-maintenance of input stock cannot be a criterion to conclude suppression when the stock can be arrived at by the quantity in process and by quantity of final products. Penalty set aside - appeal dismissed - d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of the stock was calculated and arrived at. The letters given by respondent dated 17.11.2003, 03.10.2003 and 20.11.2003 were also considered to arrive at the value of the inputs lying in stock and also to determine the amount of credit which has to be reversed by the assessee. The officers came to the conclusion that the total value of inputs lying in stock as on 31.03.2003 being ₹ 84,48,924/- the respondent/assessee ought to have reversed ₹ 13,51,828/- as CENVAT credit availed on inputs. The assessee having reversed only ₹ 3500/-, the department seized goods valued ₹ 84,48,924/- on 11.09.2003. 3. There upon, a Show Cause Notice dated 28.01.2004 was issued wherein the following main allegations were made: [Relevant part of Show Cause Notice reproduced as under] Para 18 . The fact of non-reversal of the entire credit taken on the inputs lying in stock as on 31.03.2003 was never disclosed to the department. It came to the light only on enquiry by the department. Further, as stated above the assessee has maintained their raw material register in such a way that there is no closing stock of inputs in their books of accounts with an intent to suppr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls) and vide Order-in-Appeal dated 30.12.2005 the Commissioner (Appeals) upheld the order passed by adjudicating authority, however, reduced the redemption fine to ₹ 15,00,000/-. The assessee preferred an appeal before the Tribunal. It is seen from the Final Order of the Tribunal dated 21.11.2007 that the assessee did not challenge the liability to reverse the credit of ₹ 13,51,828/-, and the confirmation of demand in this regard. The main contest by assessee before the Tribunal was that no penalty can be imposed and that the goods are not liable for confiscation. Therefore, vide Final Order No. 1328/2007 dated 21.11.2007 the Tribunal remanded the matter to the original authority for the limited purpose of examining the plea that penalty is not leviable under Section 11AC as there was no suppression of facts and also that goods are not liable for confiscation. Thus the issue of reversal of CENVAT credit to the tune of ₹ 13,451,828/- attained finality. 6. The matter was taken up for adjudication as per the remand order of the tribunal and vide order-in-Original dated 03.0.2008 the adjudicating authority imposed penalty of ₹ 13,51,828/- under Section 11AC o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sesses has not submitted input stock statement to arrive at actual credit to be reversed. A case has been booked by Headquarters Anti Evasion. 8. The assessee while opting for the SSI benefit is required to quantify the actual credit that has to be reversed by them from the inputs as well as stock of semi processed goods and finished goods manufactured out of the credit availed inputs lying in the factory as on 01.04.2003. But the assesses failed to do the same. The SSI exemption from payment of duty is available to an assessee opting for Notification No. 8/2003-CE dated 01.03.2003. The assessee reversed only ₹ 3500/- which was disclosed as closing balance of credit as on 01.04.2003 as if on this date, they had no stock what so ever in their factory. The Ld. AR, argued that the main defence put forward by assessee is that they were not aware that the credit availed on inputs lying in stock, in semi-processed goods and finished goods has also to be reversed. He contended that if it was a mistake due to ignorance of law, the assessee, on their own, ought to have reversed the amount along with interest immediately on pointing out the same. However, the assessee did not do so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d show that assessee had been maintaining CENVAT register and disclosing the credit availed in the same way. The department had not objected it. The balance as per the register and returns is ₹ 3500/- which the assessee reversed. iii) The assessee had filed statement/declaration to the department dated 05.04.2003 delivered to department on 17.04.2003 regarding intention to opt for SSI exemption benefit as per the new notification No. 8/2003 dated 01.03.2003. Further, quarterly returns were filed on 17.07.2003 which showed the credit reversed as ₹ 3500/-. iv) The Anti-Evasion Wing conducted search on 11.09.2003 and booked the case without accepting the contention of appellant. The appellant believed that reversal of credit in balance would be sufficient. v) The appellant had contested the case and sought for remand by the Tribunal as the appellant believed that confiscation and penalty imposed is illegal. vi) That mens rea or guilty mind is essential for imposing penalty under Section 11AC of the Act. This ingredient is wholly absent since the appellant had disclosed the credit taken in the return filed regularly and had also disclosed the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the act other appellant would qualify for invocation of the same. Here the important issue is regarding the intent to evade payment of duty and mere failure to pay duty cannot attribute that the ingredients of the penal section are attracted. It needs to be proved by the accuser that a deliberate attempt was there to avoid paying the duly. In this case i find that the appellant had submitted quarterly returns to the Department as prescribed under on 17.07.2003 with the said in information. The adjudicating authority takes shelter under the fact that the same was scrutinized in January, 2004 whereas the case was detected before the said scrutiny and the notice was not on the basis of the returns/records filed by the appellants. This cannot be so. The fact that the appellant ha.cl intimated the Department regarding availing benefit of the SSI exemption Notification and that as per law submitted details of the debit made by him precludes the Department from invoking a clause of suppression. The officers had the chance to call for the details of the debits to verify the correctness of the same and take remedial action. To merely state that maintenance of records was in such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated to conceal the stock of credit availed inputs. However, they do not allege any discrepancy in the monthly returns filed by the assessee or in particular on the credit taken on inputs. In the earlier Order-in-Original dated 30.03.2004 the adjudicating authority has reproduced the relevant columns of the monthly returns submitted by the respondent from April, 2002 to March, 2003 which is as under: Input Cred it Opening Balance Credit taken during the month Credit utilized during the month Closing Balance Month 2002-2003 CENVAT 3,129 11,58,159 95,764 65,519 April, 2002 DO 65,519 2,20,498 1,85,607 1,00,410 May, 2002 DO 1,00,410 3,22,606 3,12,811 1,10205 June, 2002 DO 1,10,205 18,804 1,25,806 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiny of the returns which disclosed the reversal of credit and called for details from the respondent. That the mistake ought to have been pointed out to the respondent even before search and show cause notice as the mistake is only a remedial mistake. In spite of the search conducted in the premises and verification of records done by the Anti-Evasion Wing of the Department, no case has been alleged against the respondent that the respondent availed wrong credit or that the respondent availed irregular credit with intent to evade payment of duty. This can only point to the conclusion that the credit availed by the respondent and the returns filed are proper and do not contain any discrepancy. The only allegation is that the respondent ought to have reversed the amount of credit already taken in respect of inputs lying in stock, semi finished goods and finished goods. As already discussed the notification at the relevant time was a very new notification. For this reason the contentions of the respondent that they were under the impression that the closing balance of credit as per register is required to be reversed merits consideration. 13. Another ground raised by the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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