2011 (5) TMI 74 - AT - Central Excise

Penalty - Under the provisions of Rule 15 (2) of the CENVAT Credit Rules read with Section 11AC - Importer could not produce evidence of any actual receipt of spectrometer into their factory and the entry of the same in the private records - Held that the matter can be decided by directing that the officers visit the factory of the assessees and satisfy themselves as to the availability of the spectrometer in question in the factory - Hence set aside the impugned order and remit the case to the adjudicating authority.

Summary

Issues:
Challenge of penalty imposition under Rule 15(2) of CENVAT Credit Rules with Section 11AC of Central Excise Act for failure to produce evidence of actual receipt of imported capital goods in factory.

Analysis:
The assessees contested the penalty imposed for the inability to provide evidence of the receipt of Direct Reading Optical Emission Spectrometer in their factory as per Bill of Entry. They claim the capital goods are present in their factory and seek a visit and inspection by Central Excise officers to prove the machine's availability. The counsel argued that if the machine is verified to be the imported one, penal action should not be justified even if credit reversal is accepted.

Upon evaluating the submissions, the judge directed an inspection of the factory to verify the presence of the spectrometer imported on 10.7.07. If the assessees can demonstrate that the machine in their possession matches the imported one, the basis for penalizing them for non-receipt of the machine would be unfounded.

Consequently, the impugned order was set aside, and the case was remitted to the adjudicating authority for fresh orders following the inspection and providing a fair hearing to the assessees. The judge emphasized conducting the inspection promptly for a swift resolution.

The appeal was allowed through remand, emphasizing the importance of establishing the presence of the imported spectrometer in the factory to determine the validity of the penalty imposed.