9911796707
TMI Blog2013 (12) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... r hearing both the sides, we find that the appellant is engaged in the manufacture of motorcycle and parts thereof. They were availing the benefit of Cenvat credit of duty paid on various indigenously procured parts as also duty paid on the imported parts. There is no dispute about the availment of the said Cenvat credit. However, as the parts are cleared to various vendors for further manufacture, the appellant was required to reverse the credit in terms of provision of Rule 3(5) of Cenvat Credit Rules, 2004, at the time of clearance of such parts. Their vendors were availing credit of the same and were utilizing the same for payment of duty on their manufactured products. 3. The appellant had installed a software system for reversal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of around 55 lakhs. He submits that payment of interest is penal in nature and inasmuch as the appellant has not detained any benefit by reversal of credit, imposition of penalty upon them is neither warranted nor justified. He submits that whatever credit was being reversed by them at the time of clearance of parts, the same was available as credit to the vendors. As such the entire situation was revenue neutral without any pecuniary benefit to the appellants. Relying upon various decisions, he submits that penalty under Section 11AC can be imposed only in the cases of mala fide and not in genuine cases of procedural or technical infractions. Ld. Advocate draws our attention to decision of the Commissioner wherein he has clearly held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any mala fide intention on the part of the assessee and the entire situation was revenue neutral. By reversing the differential amount subsequently, the appellant had to pay interest of amount of Rs. 55 lakhs which payment is penal in nature and the appellant, in no way, stands benefited by such huge payment of interest. 8. In fact, we find that the Commissioner has given a finding in favour of the assessee, when he observed as under :- "I find that the said ingredients viz. fraud, collusion, wilful mis-statements and suppression of facts required to invoke extended period of limitation are not present in the instant case. Though M/s. HHML after finding the mistake of non-reversal of full Cenvat credit availed on imported inputs at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued under these rules, then a penalty not exceeding the duty involved on the excisable goods of which any contravention has been committed or Cenvat Credit wrongly taken is be leviable on the manufacturer, producer, registered person of a warehouse or registered. In the instant case though the entire amount along with interest has been deposited before the issue of notice, M/s. HHML has contravened the provisions of Rule 3(5) of the Cenvat Credit Rules, 2004 by not reversing the Cenvat credit availed on imported inputs at the time of their clearance as such to their manufacturer vendors. They have retained inadmissible Cenvat credit which could have been detected rnuch earlier if proper intensive scrutiny of the documents has been under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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