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TMI Blog2010 (9) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... from October, 2008 to December, 2008, due to the change in staff attending Central Excise CENVAT credit work, there was duplication in the entry of credit to the tune of Rs. 176.27 lakhs, which is also reflected in the monthly ER-1 returns. On 4-12-2009 the departmental officials discovered the above mistake and recorded statements from the deponent of the affidavit on 5-12-2009 and on 7-12-2009. (c) According to the petitioner's affidavit, it was stated in the said statement dated 5-12-2009 that the mistake was made due to inadvertence and not intentional and the petitioner Multi-National Company is having an annual turnover of Rs. 700 crores and is having a credit balance of Rs. 20 crores at any given time. The said mistake was committed by the lower level officials and the wrong credit taken remained unutilised in the books of accounts. Another statement was recorded on 7-12-2009 from one K. Dassarathane, who is an Assistant commercial Officer of the petitioner company, who also said to have stated that the Company is receiving 200 to 250 invoices/bills of entry every day and the five volumes of input invoices resulted in duplication of credit. (d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the third respondent and in any event there is no revenue loss to the Government since the petitioner has not utilised the credit accounted in the books. The proceedings issued under Notification No. 32/2006 is to be set aside as it is in violation of the principles of natural justice. 3.The respondents have filed counter affidavit contending as follows : (i) Rule 12AA of CENVAT Credit Rules, 2004 and Rule 12CC of the Central Excise Rules, 2002 were issued due to past experience of working and empowering the Central Government with the power to impose restrictions with certain types of cases having regard to the extent of misuse, nature and type of offences and such other factors on public interest. (ii) In the petitioner's case, on specific intelligence, the Head Quarters Preventive Unit of Puducherry Central Excise Commissionerate, on verification identified that the petitioner had availed credit twice over the duty specified in the impugned document received from another Unit of the petitioner Company in the same premises, registered as 100% export oriented unit. An amount of Rs. 1.76 crores has been availed as credit twice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er's contention that double entry was made by oversight cannot be sustained and the credit availed was with intention and therefore the impugned order is sustainable in terms of Notification No. 32/2006. 4. A reply affidavit is filed by the petitioner company denying the averments made by the department in the counter affidavit. 5.Heard the learned counsel for the petitioner company and the learned counsel for the respondents. 6. The learned counsel for the petitioner relied upon the judgment of this Court reported in 2010 (256) E.L.T. 3 (Mad.) (Global Stamping & Welding Automotive P. Ltd. v. C.B.E. & C., New Delhi) and contended that unless the intention to defraud the department is made out, the impugned order like the one cannot be passed. 7. The learned counsel for the respondents on the other hand relied on an unreported decision of the very same learned Judge made in W.P. No. 4764 of 2010 dated 16-4-2010 (M/s. Reil Electricals India Limited v. C.B.E. & C. and Others) [Since reported in 2010 (255) E.L.T. 43 (Mad.)] and contended that if there is prima facie material available, such restriction order can be passed pending adjudication. 8. I have con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other evidence, and after satisfying himself that the person has knowingly committed the offence as specified in para 1, may forward a proposal to the Chief Commissioner or Director General of Central Excise Intelligence, as the case may be, specifying the facilities to be withdrawn and restriction to be imposed and the period of such withdrawal or restrictions, within 30 days of the detection of the case, as far as possible. (2) The Chief Commissioner of Central Excise or Director General of Central Excise Intelligence, as the case may be, shall examine the said proposal and after satisfying himself that the records and evidence relied upon in the said proposal are sufficient to form a reasonable belief that a person has knowingly committed the offences specified in para 1, may forward the proposal along with his recommendations to the Board. However, the Chief Commissioner of Central Excise or Director General of Central Excise Intelligence, before forwarding his recommendations, shall give an opportunity of being heard to the person against whom the proceedings have been initiated and shall take into account any representation made by such person before he forwards hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of the Revenue as well as to have a check on the breach of law consciously committed by an assessee, leading to evasion of duty; that restrictions imposed as to the payment of duty and availing of Cenvat credit would bring an erring assessee to comply with the provisions in accordance with law. The restrictions imposed are only for a restricted period of time. Given the nature of restrictions thus imposed, that too on a satisfaction of the conduct of the assessee knowingly committed the violation, rightly, in the case on hand, the respondents had assed the impugned order, it must be noted that such restrictions are necessary to ring the erring assessee on the correct rails, so that there is a compulsion on statutory compliance atleast in the future. It is further seen that to avoid any arbitrary exercise of authority in imposing restrictions, the Board had laid down broad outline and the circumstances which warrant imposition of restriction. A reading of various circumstances narrated warranting imposition of restrictions clearly shows that these measures are aimed at preventing duty evasion arising on account of removal of goods without payment of duty and availing of CENVAT cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod from the first day of the month succeeding the month in which duty was payable till the payment of duty); and Section 11AC (penalty for short levy or non-levy of duty) of the Central Excise Act, 1944. The Supreme court held that penalty as punishment for an act of deliberate deception by the assessee, with an intent to evade duty, will inevitably lead to imposition of penalty. The decision of the Supreme Court reported in (2006) 5 SCC 361 (Chairman, SEBI v. Shriram Mutual Fund) explains how to decide civil liability and criminal liability in tax matters. In para 34, it is held thus, "34. The Tribunal has erroneously relied on the judgment in Hindustan Steel Ltd. v. State of Orissa which pertained to criminal/quasi-criminal proceedings. That Section 25 of the Orissa Sales Tax Act which was in question in the said case imposed a punishment of imprisonment up to six months and fine for the offences under the Act. The said case has no application in the present case which relates to imposition of civil liabilities under the SEBI Act and the Regulations and is not a criminal/quasi-criminal proceeding." Thus, the learned counsel for the petitioner cannot contend that unles ..... X X X X Extracts X X X X X X X X Extracts X X X X
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