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TMI Blog2013 (6) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... g the benefit of CENVAT credit of duty paid on the inputs/capital goods and input services under the provisions of CENVAT Credit Rules, 2004. During the course of preventive checks, it was observed that the appellant has availed and utilized CENVAT Credit of service tax of service tax for the services received prior to 10.09.2004. Accordingly a summon was issued on 13.01.2006 by Supdt. (Prev.), Central Excise & Customs, Vadodara-II to the appellant to provide the details of the credit of service tax availed for the services received prior to 10.09.2006. On scrutiny of the details provided by the appellant vide letter dated 24.01.2006, it was observed that the appellant has availed and utilized the credit of service tax totally amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to Rs.1,47,221/- under Rule 15 (2) of CENVAT Credit Rules, 2004 read with Section 11 AC of Central Excise Act, 1944. 3. Aggrieved by such an order, the appellant preferred an appeal before first appellate authority. The first appellate authority did not agree with the contentions raised respect of penalty and upheld the order of the adjudicating authority in to-to. 4. Ld.Counsel appearing on behalf of the appellant submits that they are not disputing the reversal of CENVAT Credit and interest thereof which has been done so by them as pointed out by the Audit party. It is his submission that they are challenging only the penalty imposed by the lower authorities under Rule 15(2) of CENVAT Credit Rules, 2004. It is his submission that prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very same rule was being considered by the co-ordinate Bench of the Tribunal in the case of Davangere Sugar Company (supra) (wherein I was the Member), wherein the Bench held as under:- 7. It can be seen from the relevant paragraphs of the impugned order, that the appropriate provisions of Rule 15 of the CENVAT Credit Rules, 2004 as it was before amendment were not correctly appreciated. The said Rule reads as under:- Rule 15 of CENVAT Credit Rules, 2004 - pre-Amendment 15. Confiscation and Penalty (1) If any person, takes CENVAT credit in respect of input or capital goods, wrongly or in contravention of any of the provisions of these rules in respect of any input or capital goods, then, all such goods shall be liable to confiscation an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing the principles of natural justice. 8. On a main perusal of the above reproduced rules, it can be seen that provisions of sub-rule (2) can be brought into picture only where Cenvat credit, of duty on inputs or capital goods is availed on account of fraud, willful misstatement. Provisions of sub-rule (3) can be brought into play for denial of CENVAT credit of input services and penalty can be imposed as indicated therein prior to amendment. It is seen that provisions of Section 11AC of Central Excise Act or Rule 15(2) could not be invoked, as the issue was of credit on input services. At the most, for the violations of availing ineligible credit, the appellant can be penalized under the provisions of Section 15(3) for an amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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