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2015 (7) TMI 262 - AT - Central ExciseNon Reversal of CENVAT Credit on Closure of factory - allegation that appellants have closed down their Lead plant in July 1999 and dismantled the same in December 2003 and have not reversed the credit of Cenvat availed on lead concentrate lying in stock - Held that:- Lead concentrate was recovered at the time of dismantling of the plant and it cannot be said that the assessee had intention to evade duty or avoid payment of tax and there is no clandestine removal. The appellant's claim is that the lead concentrate was received prior to 1994. Subsequently, finding no evidence for the same, they dropped the claim. Having regard to the facts and circumstances of the case, I consider that since the duty liability is not contested and even if it is not paid, learned counsel for the assessee has accepted the liability, the penalty can be waived. The reversal of credit is specifically under Rule 3 itself and instances where credits suffer reversal have been specified there itself. The Rule, as it exists after amendment of 2009, provides for reversal of credit when inputs where cleared 'as such' or written off in the books of account because the inputs became unfit for use. Another provision for recovery of Cenvat credit is available under Rule 14 of Cenvat Credit Rules. This Rule provides for recovery of Cenvat credit wrongly taken or erroneously refunded. The Commissioner (Appeals) has discussed the provisions of Rule 3 relating to reversal and explained that situation in this case is not covered by the provisions. Rule 14 is not applicable since when the credit was taken on Zinc concentrate it was taken correctly and, it cannot be said that the credit was wrongly used since there is no such allegation. In this case, the provisions of Rule 14 are also not applicable. - penalty imposed on the appellant equal to the amount of confirmed duty of ₹ 8,96,325/- is set aside. The demand for Cenvat credit on the inputs cleared 'as such' is sustained and the assessee should pay the same with interest - Decided partly in favor of assessee assesssee.
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