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M/s Heranba Industries Ltd, Shri Raghuram K Shetty, Smt Beena Thomas, Shri Prakash Gulabbhai Desai Versus Commissioner of Customs And Central Excise, Daman

2015 (7) TMI 582 - CESTAT AHMEDABAD

Denial of CENVAT Credit - CENVAT Credit on the basis of the xerox copies of invoices and bills of Entry - held that:- Excess availment of credit was made with intention to evade payment of duty. The case law in the case of Pratam Fab Processors pvt. Ltd (2013 (9) TMI 502 - CESTAT MUMBAI) as relied upon by the learned Authorised Representative would not be applicable in this case. In that case, two Show Cause Notices were issued to the Appellant for excess availment of credit. It is seen that the .....

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s availment of credit for more than ₹ 1 Crores, we find that it is a fit case to impose penalty under Rule 15(1) of CENVAT Credit Rules. 2004. Regarding the penalty imposed on other Appellants, we find that they are the employees of the Appellant Company. There is no evidence of direct involvement of the Appellant for excess availment of credit deliberately. Hence, in our view, the imposition of penalties on other Appellants are not warranted. - disallowance of CENVAT credit along with int .....

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ndustries Ltd. (Appellant No.1) was engaged in the manufacture of Organic Chemicals and Agrochemicals, classifiable under Chapter 29 & 30 of Central Excise Tariff Act, 1985. During the course of audit for the period June 2004 to March 2007, the scrutiny of the CENVAT documents i.e. RG 23A Part II Register and CENVAT invoices, it was noticed that the Appellant No.1 had taken excess CENVAT Credit of ₹ 1,04,09,699.00 and ₹ 9,59,538.00..It was also noticed that they had availed CENVA .....

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The Adjudicating Authority confirmed the demand of CENVAT Credit alongwith interest and also appropriated the amount deposited by them. It has also imposed penalties on other appellants. The matter went up to the Tribunal. The Tribunal by Final Order No.A/883-885/WZB/AHD/2010, dt.07.07.2010, remanded the matter to the Adjudicating Authority, with certain directions. By impugned order, in de-novo adjudication, the Adjudicating Authority disallowed the CENVAT Credit of ₹ 1,27,73,273.00 alon .....

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nt No.1. Hence, the appellants filed these appeals. 4. Learned Advocate on behalf of the Appellants submits that they have already reversed the credit of about ₹ 1.14 Crores and also paid interest to the extent of credit utilized by them. He submits that the demand of interest on unutilized credit is not justified in view of the various decisions of High Court and Tribunal, as under:- a) CCE Madurai Vs M/s Strategic Engineering (P) Ltd. 2014 (310) E.L.T. 509 (Mad.) b) CCE Vadodara-Il Vs M/ .....

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r. Smt. Beena Thomas, Accounts Officer in her statement before the officers admitted that she has taken excess credit as she was not having the knowledge of Central Excise. Hence, the imposition of penalty under Section 11AC of Central Excise Act, 1944 is not warranted. Regarding the imposition of penalties on other Appellants, it is submitted that they are the employees of Company and therefore imposition of penalties on other Appellants are not justified. They had no personal gain. 6. On the o .....

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(265) ELT 3 (SC). He further submits that there is no reason for remand of the matters for verification of Bills of Entry/Invoice, for the reason that in the second round of litigation, they have not filed the documents with the appeal itself. He further submits that the Appellants deliberately had taken excess credit with intention to evade payment of tax, which was detected by the Central Excise officers during the audit and therefore, imposition, of penalty under Section 11AC is warranted. He .....

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d that it is appropriate to reproduce the relevant portion of the remand order of the Tribunal as under:- "6. After hearing the learned SDR, we find that the appellants are not disputing confirmation of excess credit availed them. The challenge in the present appeal is only to interest and penalty. Law on the issue of interest stand declared by Tribunal in number of cases as reproduced above. Since the Commissioner has observed that the appellant has utilized the Modvat Crdit whereas it is .....

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emanded the matter to Commissioner, he would also re-decide the question of rejection of claim of ₹ 13,71,459/- in the light of the law declared by the Tribunal in relied upon judgments as also by taking into account the fact of production of 5 invoices in original. 8. The question of imposition of penalties would also be re-decided by him in the remand proceedings. Needless to say that the appellant would be given an opportunity to put forth their case and are at liberty to raise any lega .....

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led the original documents even before the Tribunal. During the course of hearing, after about 10 years, the learned Advocate just made submission before the Tribunal that they have got the original documents. We do not find any merit in the submissions of the learned Advocate. So, the demand of ₹ 13,71,459.00 is justified. 9. Regarding the demand of interest, learned Advocate submits that they have utilized the credit partly and paid the interest thereon. On perusal of the impugned order, .....

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ppellant Company under Section 11AC of the Central Excise Act, 1944, we find that where the CENVAT Credit in respect of input and capital goods or input services has been taken or utilized wrongly by reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of said Act or rules made thereunder with intent to evade payment of duty, then the manufacturer shall also be liable to pay the penalty in terms of the provisions of Section 11A .....

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t was not made intentionally. Now, they have corrected the mistake by reversing the entire amount and started maintaining Central Excise record in proper way. She also stated in answer of other question that error was committed due to heavy workload and Shri Prakash Gulabbhai Desai never cross verified the CENVAT entries. Shri Prakash Gulabbhai Desai in his statement dt.11.09.2007, stated that Smt Beena Thomas who was his assistant in Central Excise work and Authorised Signatory also for the sai .....

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