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2015 (10) TMI 2345 - AT - Central ExciseCenvat Credit - Storage of input outside the factory - Removal of goods without necessary permission under Rule 8 of CENVAT Credit Rules 2004 - delivery of the letter written by the Appellant has been questioned by the Department - Confiscation and penalty - Held that:- Inputs were cleared without necessary permission and without reversal of appropriate amount of CENVAT Credit as undertaken by the Appellant. As per the provisions of CENVAT Credit Rules 2004, when the inputs are cleared as such from the factory premises, then equivalent amount of CENVAT Credit is required to be reversed. By not doing so, the Appellant has contravened the provisions of CENVAT Credit Rules 2004 and by virtue of the provisions contained in Rule 15(1) of CENVAT Credit Rules 2004, such inputs are liable to confiscation. Accordingly, the order of confiscation made by the Adjudicating authority is proper and cannot be faulted with. - However redemption fine imposed by the Adjudicating authority is reduced to ₹ 1 lakh. In case, the entire quantity of inputs were used in the manufacture of finished goods or cleared as such on payment of duty, then the question of imposing penalty under Section 11AC of Central Excise Act, 1944 read with Rule 15 of CENVAT Credit Rules will not arise, except for payment of interest on CENVAT involved from the date of clearance of inputs from the factory till they are used in the manufacture of finished goods or cleared as such on discharge of appropriate amount of duty. So far as imposition of penalties upon other Appellants is concerned, it is observed that these penalties have been imposed under Rule 26 of CENVAT Credit Rules 2004 and not under CENVAT Credit Rules 2002. Penalties upon the other Appellants for violating CENVAT Credit Rules 2004, can only be imposed under the penal provisions of CENVAT Credit Rules 2004 and not under Rule 26 of Central Excise Rules, 2002. Appeals filed by the other Appellants are accordingly allowed. - Decided partly in favor of assessee.
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