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2016 (5) TMI 1049 - CESTAT KOLKATAEligibility of Cenvat credit of NCCD - paid on input panmasala received by the appellant from the suppliers who availed the benefit of Notification No. 27/2001-CE dated-11/5/2001 - Rule 3(1)(v) of the CENVAT Credit Rules - Held that:- the contention raised by the appellant, that NCCD duty credit utilized by debiting the CENVAT Credit account, cannot be denied for units not availing area based exemption, is acceptable as these amounts are not hit by the CENVAT Credit Rules. The amount of such NCCD Credit rejected, if any is required to be quantified by the Adjudicating authority and the same will be admissible to the appellant. Invokation of extended period - Rule 14 of the Cenvat credit Rules, read with Section 11A of the Central Excise Act, 1944 - NCCD credit taken by appellant was duly reflected in their periodical returns filed with the department alongwith a list of raw materials supplied with their address and registration numbers - Held that:- as it is observed from the ER-1 return copies for the month of March, 2002, March, 2003 and March, 2004 that appellant has indicated the NCCD CENVAT Credit taken by the appellant. Appellant has also given a list of all the input materials and their registration numbers. It is also observed from the covering letters filing ER-1 returns that even photo copies of Cenvatable invoices were also submitted to the department by the appellant. Therefore, five year’s extended period of demand cannot be invoked against the appellant. However, the entire demand is not time barred as the period of demand is 11/5/2001 to 31/3/2006 and the show cause notice is issued on 10/08/2006. The CENVAT credit taken within the normal period of limitation is not admissible to the appellant and is required to be paid alongwith appropriate interest under Section 11AB of the Central Excise Act, 1944. Imposition of penalty - Held that:- the issue involved in the present appeal was a case of interpretational dispute. All the relevant facts and provisions of CENVAT Credit Rules were known to the department also. Periodical audits of the appellant’s unit were also done by the Internal Audit parties of the department. If department could not raise doubts about the admissibility of credit then Appellant cannot be held responsible for taking a deliberately wrong credit for imposing penalty. Accordingly, it is held that penalty under Rule 15 of the CENVAT Credit Rules, 2004 cannot be imposed and is set aside. - Appeal disposed of
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