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TMI Blog2013 (8) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... to April 2008, Unit-I took CENVAT credit on certain input services totaling to Rs.4,98,899/- though it was not eligible to do so. This credit was, in fact, meant for Unit-II (provider of output service). The irregular availment of CENVAT credit by Unit-I was noticed by the Department in October 2008, whereupon the credit was reversed forthwith on 16/10/2008. Later on, interest was paid on 01/02/2010. Meanwhile, show-cause notice dt. 21/04/2009 was issued by the Department requiring the appellant (Unit-I) to show-cause as to why (a) an amount of Rs.4,98,899/- being CENVAT credit irregularly taken on invoices pertaining to other unit should not be recovered under Rule 14 of CENVAT Credit Rules read with proviso to Section 11A of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15(4) was alleged in the show-cause notice. Both the provisions have been invoked against the assessee by the lower appellate authority in violation of the principles of natural justice inasmuch as they were not put to notice of any such proposal. The learned counsel has relied on the following decisions:- 1. CCE, Pune-I vs. Thermax Ltd. [2010(254) ELT 111 (Tri. Mumbai)] 2. Lanco Industries Ltd. vs. CCE, Tirupathi [2011(265) ELT 118 (Tri. Bang.)] 3. CCE, Meerut vs. BHEL [2012(280) ELT 433 (Tri. Del.)] 4. The learned Additional Commissioner (AR) refers to the show-cause notice and submits that, if the averments/allegations contained in paragraphs 2, 5 and 6 are read together, the show-cause notice will be found to have set up a case for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act. For imposing a penalty on any person under the above provision, the Department should clearly allege in the relevant show-cause notice that such person has wrongly taken or utilized CENVAT credit on input services by reason of fraud, collusion, wilful mis-statement, suppression of facts or contravention of any of the provisions of the Finance Act, 1994 or of the rules made thereunder with intention to evade payment of service tax. None of these ingredients was alleged in the subject show-cause notice for imposing penalty on the appellant under Rules 15(4). Para 5 of the show-cause notice contains an allegation to the effect that the appellant had contravened certain rules with intention to evade payment of duty, but such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, there can be no penalty on the respondents under Section 11AC of the Act. In the cases of UOI v. Dharamendra Textile Processors - 2008 (231) 3 (S.C.) and UOI v. Rajasthan Spinning & Weaving Mills - 2009 (238) 3 (S.C.), it was emphatically laid down by the Apex Court that a penalty under Section 11AC of the Act was mandatory where one or the other ingredient for such a penalty specified under that section was alleged and established by the Revenue against the person sought to be penalised. None of such ingredients was alleged by the Revenue in any of these cases, let alone proof thereof. In all these cases, the lower appellate authority proceeded on the premise that the penalties imposed by the original authority were under Section 11AC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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