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2015 (7) TMI 496 - CESTAT CHENNAI

2015 (7) TMI 496 - CESTAT CHENNAI - TMI - Irregular availment of capital goods credit availed on the CVD paid on the imported capital goods cleared under EPCG licence - Held that:- Appellant's case is squarely covered under Section 11A (2B) which stipulates not only voluntary payment of duty by the assessee but also any amount pointed out by the officers. In the instant case, it is evident that internal audit was conducted and the officers informed the appellant the irregular availment and direc .....

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As regards the co-noticee, original penalty of ₹ 48 lakhs imposed by the adjudicating authority was reduced to ₹ 1 lakh by the LAA. After considering the merits of the case, I do not find any merit for full waiver of penalty. Accordingly the reduced penalty of ₹ 1 lakh imposed on the co-noticee is upheld - Decided partly in favour of assessee. - Appeal No. E/MISC/40218/2015, E/139/2008 and E/140/2008 - FINAL ORDER No.40660-40661/2015 - Dated:- 18-6-2015 - Hon ble Shri R. Perias .....

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Shri M. Saravanan, Consultant. None is represented for Appellant Shri K. Palanisamy, in Appeal No. E/140/2008. Since the issue involved in these appeals is arising out of common impugned Order-in-Appeal, both are taken up together for disposal. 3. The short issue in this case relates to irregular availment of capital goods credit availed on the CVD paid on the imported capital goods cleared under EPCG licence where no CVD was paid. Appellant imported three machines and cleared EPCG licence @ con .....

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e Commissioner (Appeals) upheld the demand but reduced the penalty imposed on the second appellant from ₹ 48 lakhs to ₹ 1 lakh. Hence the present appeals. 4. Ld. Consultant representing for the main appellant submits that their factory is located at Dharapuram and their Head office is located at Tiruppur and all the import and export clearances and payment of duties were handled at their head office. The capital goods are received in their unit at Tarapuram. He further submits that i .....

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ted the factory on 12.1.2004 and on being pointed out by the audit, they immediately accepted and reversed the entire credit on 31.1.2004 and also paid the interest amount of ₹ 6,20,739/- on 20.2.2004. Since the audit conducted verification and as per audit report they have complied with the report, they were under the bonafide belief that the issue was closed. He drew my attention to para-13 of Audit Manual of Excise Audit 2000 at page 6.139 wherein at para (13) it is stated that once the .....

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only voluntary payment but so payment of duty as pointed by officers. Therefore, extended period of limitation is not invocable in this case and no penalty is imposable as they have duly complied with the report. The investigation did not led to any new facts or suppression as they have clearly admitted the mistake at the time of audit itself. Imposition of penalty is not warranted as they have already paid duty and interest as per audit objection. He relied on the following citations :- (i) Hin .....

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credit and utilised the same. Suppression of facts and intention to evade payment is established and it was paid only on being pointed out by the audit. The Managing Director and the Administrative officer have clearly admitted the mistake. Therefore penalty is imposable on both the appellants. Section 11A (2B) is not applicable as this is not a case of short-payment of duty. He relief on the following case laws :- (i) Gulabchand Silk Mills Pvt.Ltd. Vs CCE Hyderabad 2005 (184) ELT 263 (ii) Amex .....

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t. This is evident at para-4 of the OIO and para 6.4 of OIA wherein it is clearly recorded that officers visited the appellant s unit for conducting internal audit of records on 12th, 13th & 14th January 2014 and detected lapse. It is also mentioned in the order that appellants have paid the entire amount on 31.1.2004 immediately on receipt of audit objection and also paid the entire interest amount of ₹ 6,20,739/- on 20.2.2004. Therefore, it is evident from the above facts that the ap .....

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even though no CVD is payable the Bill of Entry contained assessed value and B.C.D and C.V.D. calculated and mentioned in the said B/E. The CVD amount was quantified in the Bill of Entry by the Customs for the reason that in the event of non-fulfilment of EPCG licence the department has to recover customs duties forgone. The appellant s plea that the person who was handling excise matter had mistakenly taken the CVD amount based on B/E details has some force for the reason importation of goods .....

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t place, it is a bonafide mistake of the employee of the company who took the credit of CVD amount mentioned in the assessed Bill of Entry. There appears to be no suppression of facts with intention to evade payment of duty as alleged by Revenue. In this regard, I rely the Hon ble Karnataka High Court decision in the case of CCE Bangalore Vs Geneva Fine Punch Enclosures Ltd. (supra) where Section 11AC penalty has been set aside and held that as there is no deliberate intention to evade payment o .....

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person shall pay the amount so determined. Section 11A(C) makes it clear that the liability to pay the penalty arises on the person who is liable to pay duty as determined under sub-Section 2 of Section 11A. 6. Therefore, the determination of liability to pay duty is a condition precedent for imposing penalty. If after demand of duty if the assessee without contesting the claim voluntarily pays the duty and interest payable thereon for the delay in payment of duty on the stipulated day, the que .....

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t there is no determination of duty. Secondly, the aforesaid requirement i.e., the cause of evasion of duty is not mentioned in the show cause notice. Further that the entire duty and interest was paid voluntarily on being pointed out. It held that no case for imposing the penalty is made out. The commissioner was in total error in passing the order and imposing the penalty. Under these circumstances, we do not find any infirmity in the order passed by the Tribunal. No substantial question of la .....

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s Tariff Act, 1975. The submission on behalf of the appellants was that in view of nomenclature of the levy of additional duties in lieu of sales tax and local levies being additional duties they have taken credit bona fidely as they believed that all additional duties were eligible as credit. The submission deserves to be accepted. Further, as submitted by them, details of credit taken were furnished by them in the returns submitted by them. This is a fit case that the Department should have re .....

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