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2020 (6) TMI 121 - AT - Central ExciseLevy of penalty - re-credit of CENVAT Credit - Furnace Oil used as “fuel” in the manufacture of both dutiable and exempt goods (Wood Pulp) - the furnace oil is partly captively consumed in the same factory for manufacture of dutiable VSF and partly cleared at Nil rate of duty to Sister Unit at Nagda (MP) for manufacture and clearance of dutiable VSF - Department entertained the view that the re-credit of cenvat taken by the appellant on its own which was earlier reversed was in violation of Rule 6(1) of Cenvat Credit Rules, 2002 - HELD THAT:- In the present case the appellants were reversing the cenvat credit on furnace oil used as fuel in the manufacture of dutiable VSF and exempted Wood Pulp, a part of which was being stock transferred to Sister Unit at Nagda for the manufacture of dutiable VSF. Subsequently, the appellant came to know that the High Courts and the Tribunal in large number of judgments had taken the view that the provisions of Rule 6 of Cenvat Credit Rules, 2002 are not attracted to “inputs intended to be used as fuel” - after that the Apex Court decision in the matter of COMMNR. OF CENTRAL EXCISE VERSUS M/S. GUJARAT NARMADA FERTILIZERS CO. LTD. [2009 (8) TMI 15 - SUPREME COURT] which finally settled the issue and reversed the judgment of the High Court and the Tribunal. It is settled legal position that when there are conflicting judgments and the issue is finally resolved by the Supreme Court then in such circumstances, penalty should not be imposed. Thereafter, the appellant informed the jurisdictional authorities vide letter dated 28/04/2003 that they intend to take cenvat credit on furnace oil. Further the appellant vide their letter dated 29/08/2003 which is on record informed the Department that they had taken credit only partially till 28/02/2003 on furnace oil used as fuel and they intend to avail the balance credit for the period from 01/04/2000 to 28/02/2003 in the month of September, 2003 - The appellant deposited the entire cenvat credit which was also appropriated in the impugned order. Further we find that the appellants have also deposited ₹ 1,52,39,714/- towards interest vide Challan No. 1 dated 19/06/2012 under intimation to the Department which fact has also been accepted by the Department. Further we find that re-taking of the credit by the appellant on furnace oil used as input was not with any malafide intention but was consistent with the prevalent judicial precedent in favour of the assessee. The imposition of penalty of ₹ 11,00,000/- on the appellant under Rule 13/15 Clause (1) of Cenvat Credit Rules, 2004 is not sustainable in law - appeal allowed - decided in favor of appellant.
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