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2022 (10) TMI 800 - AT - Central ExciseLevy of equal penalty imposed under Section 11AC of the Central Excise Act, 1944 - availment of wrong credit on input services used in the Co-generation plant for generation of electricity which was being wheeled out to T.N.E.B. - input services used for manufacture of Ethyl Alcohol - extended period of limitation - HELD THAT:- On perusal of records, it is seen that though audit was conducted in the year August 2008 the show cause notice has been issued much later after a delay of 4 years on 17.07.2012. It is seen that the appellant has paid up the duty immediately when the audit had pointed out the defect of availing wrong credit. Even then, the department has taken a period of 4 long years to issue the show cause notice. It is stated in the show cause notice that appellant has suppressed facts with intention to evade payment of duty. Apart from this allegation there is no positive act of suppression brought out by the Department. There were conflicting views as to whether credit is eligible on input services used for generation of electricity that is sold outside, the appellant cannot be burdened with the guilt of suppression of facts with intent to evade payment of duty. The issue being interpretational in nature and as the department had collected all the details of availment of credit from the accounts maintained by the appellant, the penalty imposed in this regard is unwarranted - the penalty imposed with regard to duty liability of the input tax credit availed in respect of electricity (Co-generation plant) requires to be set aside. CENVAT credit of input service availed for manufacture of exempted goods - Ethyl Alcohol - only argument put forward by the Ld. Counsel for appellant is that they had availed credit by inadvertent mistake - HELD THAT:- The said mistake would not have come to light but for the audit conducted by the Department. There are no sufficient grounds for setting aside penalty on input service tax credit in respect of Ethyl Alcohol. The impugned order is modified to the extent of setting aside the penalty imposed in regard to credit availed in respect of input services used in the co-generation plant for generation of Electricity sold outside - Penalty imposed in regard to input service tax credit on the services used in manufacture of Ethyl Alcohol is upheld. The appeal is partly allowed.
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