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2017 (8) TMI 101 - AT - Central ExciseCENVAT credit - common inputs used in exempted as well as non-exempted unit - non maintenance of separate account - demand of interest - penalty - extended period of limitation - Held that: - the reversal of the credit was not done voluntarily but it was done after it was detected and pointed out by the audit - reliance was placed in the case of Hindustan Insecticiedes Ltd. Versus Commissioner Central Excise, LTU [2013 (8) TMI 225 - DELHI HIGH COURT], where it was held that in the said case notice of payment for interest was issued after four years and it was held that it was beyond a reasonable period and the department could recover the amount from the Assessing Officer, who had not taken steps for four years and not from the respondent-assessee therein. The finding of the Supreme Court on interpreting the applicable Act was that no limitation period was prescribed, therefore, proceedings for recovery could be initiated within a reasonable time - the demand of interest is clearly unsustainable. Penalty u/r 15 of CCR, 2004 read with Section 11AC - Held that: - the adjudicating authority was not convinced that the elements of Section 11AC were present. However, in the operative part of the order, the adjudicating authority has imposed penalty of ₹ 1,00,000/- but the same has been done under Section 11AC of the Act read with Rule 15 of CCR, 2004. Penalty under Section 11AC cannot be imposed in the absence of allegation of suppression in the show cause notice. Besides, discretion to reduce mandatory penalty does not vest with adjudicating authority. Considering the inherent contradiction in the show cause notice and the patently perverse nature of the order passed by the adjudicating authority in relation to penalty, the same is set aside. Appeal allowed - decided in favor of appellant.
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