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2021 (11) TMI 426 - AT - Central ExciseReversal of CENVAT Credit - inputs and input services used in production of electricity to the extent it is wheeled out - Rule 6(5) of CCR - Can a show cause notice be issued demanding an amount under Rule 6(3A) of the CCR? - levy of penalty - HELD THAT:- Rule 6 of the CCR lays down ‘Obligations of the assessee‘. These obligations are not in the form of a charging section demanding a duty but are obligations to avail CENVAT credit. Just as no assessee can be compelled to maintain separate records under Rule 6(2), no assessee can be compelled to pay an amount under Rule 6(3). The obligations under Rule 6 are in the form of various alternatives and the assessee is free to choose any option. There is no mechanism either in the CCR or in the Act to enforce any of the options or one of the options on the assessee. If the assessee does not choose any of the options and still avails CENVAT credit, such irregularly availed CENVAT credit can, of course, be recovered under Rule 14 of the CCR. Penalty u/r 15 - HELD THAT:- Rule 15 provides for imposition of penalty if CENVAT credit has been wrongly availed which allegation must be made in the show cause notice with a proposal to recover such wrongly availed CENVAT credit under Rule 14 but such a demand has not been made. Instead, a demand of an amount equal to 8%/ 10% of the exempted goods under Rule 6(3) has been made in the show cause notice, which is only an option to the assessee and cannot be demanded under Rule 14. Since the show cause notice itself has been issued without authority of law, any penalty imposed in the impugned order in pursuance of it needs to be set aside too. Appeal allowed - decided in favor of appellant.
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