TMI Blog2010 (3) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 crores in their CENVAT account during the material period. This showed that the appellants did not have the intention to avail CENVAT credit wrongly. Therefore, the demand of interest and imposition of penalty were not justified. Demand is barred by limitation and extended period not invokable. - E/969/2008-Mum - A/107/2010-WZB/C-II/(EB) - Dated:- 11-3-2010 - S/Shri P.G. Chacko, Member (J) and P. Karthikeyan, Member (T) Shri R. Nambirajan, Advocate, for the Appellant. Shri H.L. Hangshing, Jt. CDR, for the Respondent. [Order per : P. Karthikeyan, Member (T)]. - The appellants M/s. L.G. Electronics Pvt. Ltd. are engaged in the manufacture of colour television sets (CTVs). They import various electronic components for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawn; the assessee, however, failed to suitably update the software in time. In these circumstances, during the material period, the appellants happened to remove the components without paying SAD at the rate of 4% adv. paid on import and availed as credit. On the department pointing out the mistake in September 2006, the assessee made good the short payment. The show-cause notice basic to the proceedings was issued in December, 2007. The appellants submitted that the credit of SAD relatable to electronic components removed during the material period was never utilized and they always had credit in excess of Rs. 2.12 crores in their CENVAT account during the material period. This showed that the appellants did not have the intention to avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val of inputs to job worker and receive back the impugned goods manufactured by the job worker without payment of duty. It is submitted that the appellants had no reason to resort to evasion of payment of SAD, as it was open to it to remove inputs as such without payment of duty and to get the PCBs manufactured by job workers. It was a case of inadvertent omission and the penalty imposed on them was not sustainable. 2.1 The impugned demand was a revenue-neutral exercise since the principal manufacturer was entitled to take credit of the duty paid on the intermediate products. Therefore, short payment of duty on inputs at the time of their removal to job worker and the job worker not paying the full duty due was of no consequence. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rival submissions. We find that in the instant case, the appellants imported electronic components required for the manufacture of PCBs for manufacture of C.T.Vs. On import of such components, the assessee had taken the credit of CVD and SAD paid, in their CENVAT account. During the material period they removed such inputs for getting the PCBs manufactured for further manufacture of C.T.Vs. We find that the appellants had short reversed the impugned credit and the same remained in their CENVAT account. They reversed the same before issue of the show-cause notice. Had the amount been correctly reversed, the job worker could have taken credit of it to pay duty on PCBs; the duty paid on PCBs was available to appellants as credit. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital goods specified in rule 9, or contravenes any of the provisions of these rules in respect of any input or capital goods, then, all such goods shall be liable to confiscation and such person, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention has been committed, or ten thousand rupees, whichever is greater. (2). In a case, where the CENVAT credit in respect of input or capital goods has been taken or utilized wrongly on account of fraud, wilful misstatement, collusion or suppression of facts, or contravention of any of the provisions of the Excise Act or the rules made thereunder with intention to evade payment of duty, then, the manufacturer shall also be liable to pay pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement, collusion or suppression of facts, or contravention of any of the provisions of the Excise Act or the rules made thereunder with intention to evade payment of duty. We do not find that these provisions are applicable in this case. The impugned order does not find that any inputs or capital goods had been rendered liable to confiscation by the assessee on account of its taking cenvat credit wrongly on account of fraud, willful mis-statement etc. The liability involved in this case relates to credit of SAD which the assessee had not reversed on clearances of inputs violating provisions of Rule 3(5) of CCR during the material period. In the circumstances, we find that the provisions invoked for imposing penalty are also not legally cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
