2023 (1) TMI 453 - HC - Central Excise
Grant of relief by completely waiving off penalty by ignoring the fact that the offence of taking CENVAT Credit irregularly attracts penalty under Rule 15(1) of the CENVAT Credit Rules, 2004 - Input Service Credit to M/s. BRPL Jajpur for bringing Iron Ore slurry through pipeline from Barbil Plant to Jajpur Plant, when the services used for transporting such slurry are not entirely of the latter but relates to both the Plants - HELD THAT:- On the question regarding wrongful availing of CENVAT Credit, it is seen that the CESTAT has ordered that ‘the new plea’ of BRPL that they had only availed CENVAT Credit in the Books of Account at Jajpur requires to be verified/scrutinized by the Department “independently, if such claim is filed by the Appellant”. The Court is informed that since the Department had filed the present appeal more than seven years ago, it has still not undertaken the exercise of verification of the Books of Account of BRPL to ascertain in fact if it had availed CENVAT Credit at Jajpur without commencing manufacture of Iron Ore concentrate at Barbil - Without that exercise being completed, it will not be possible for the Department to ascertain if CENVAT Credit was wrongly claimed. This is one of the essential conditions for attracting the penalty under Rule 15(1) of the CENVAT Credit Rules.
The answer to the question whether penalty under Rule 15(1) of the CENVAT Credit Rules would stand attracted automatically would hinge upon the finding of wrongful availment of CENVAT Credit. The question therefore at this stage would be premature.
It may be added that it is the contention of the Assessee that there is some element of discretion available in the adjudicating officer to levy penalty under Rule 15(1) of the CENVAT Credit Rules. The Court notes at this stage that there is a distinction between the Rule 15(1) and Rule 15(2) of the CENVAT Credit Rules. As far as Rule 15(2) is concerned, the penalty is attracted in the event of there being misinformation, suppression of facts or fraud by the Assessee. Rule 15 (2) is admittedly not attracted in the present case - Rule 15 (1), on the other hand, indicates that the penalty thereunder stands attracted upon wrongful availment of CENVAT Credit without anything more having to be shown by the Department.
The Court is of the view that the conclusion reached by the CESTAT in that regard is a plausible one and calls for not interference. Consequently, the conclusion that no penalty is imposable on BRPL for availing CENVAT credit at Jajpur Plant during the period from November, 2009 to August, 2010 also calls for no interference - Appeal disposed off.