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M/s. D.M. Exporters Versus Commissioner of Central Excise, Mumbai V

2016 (6) TMI 269 - CESTAT MUMBAI

Penalty under Section 11AC - removal of non-excisable goods on payment of duty through cenvat credit - whether there is suppression of fact, mis-declaration, fraud, collusion etc? - Held that:- Appellant have debited the Cenvat Credit even though wrongly at the time of removal of non-excisable fabric, and the appellant has also paid additional equal amount in cash after issuance of show cause notice which they have not contested. - On careful reading of the show cause notice, it is find tha .....

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the part of the appellant. - Thus the penalty under Section 11AC/Rule 15(2) is not imposable on the appellant, however there is no doubt that the appellant have contravened the provision. Therefore the penalty under Section 11A is set aside and the demand of Cenvat Credit, interest and penalty under Rule 27 are maintained. The appeal is allowed in the above terms. - Appeal No. E/1348/2010 - A/86931/16/SMB - Dated:- 3-3-2016 - SHRI RAMESH NAIR, MEMBER (JUDICIAL) For the Petitioner : Shri V.S .....

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nd made ups falling under Chapters 54, 61 and 62 of the First Schedule to the Central Excise Tariff Act, 1985. They shifted their factory from Laxmi Industrial State, Penkar Pada, Mira Road (East) Gala No.7 Sarita Building, Prabhat Industrial Estate, Dahisar (East), Mumbai. The appellant while shifting the factory was having a Cenvat Credit balance of ₹ 5,62,355/- in their Cenvat Account, the appellant filed an application to the Deputy Commissioner Central Excise Borivali Division vide th .....

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.12.2004 for ₹ 5,62,354/- the said refund claim was rejected on time bar as per the RG 23A Part-II and ER-1 Returns submitted to the Range Office as on 31.7.2004, the closing balance of the quantity of inputs was shown as NIL in the Input Stock Register and which has been continued to be shown on nil till 24.3.2005. The appellant purchased 184904 L. meters. of fabrics and recorded in their Input Stock Register, maintained in RG.23A Part-I register and submitted to the Range Office with the .....

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ial, hence the appellant has wrongly utilized the Cenvat Credit lying in the cenvat account. Accordingly, it was proposed to be recovered under Rule 14 and the penalty was also proposed under Rule 15 and also under Rule 27 of the Rule. On adjudication, the demand of ₹ 5,62,107/- was confirmed for a recovery under Rule 14, and the same was appropriated as the appellant have paid the said amount on 21.09.2005 and 19.1.2006, demand of interest was also confirmed, the same was appropriated aga .....

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ve already debited the Cenvat Credit, therefore further recovery could not have been made, this will amount to double recovery of the same amount. However, the appellant is not contesting the demand as in addition to their debit entry in their Cenvat account while removing the non-excisable goods also paid the same amount in cash along with interest. The appellant is only contesting the penalty under Rule 15(2) of Cenvat Credit Rules. He submits that the show cause notice was issued within the p .....

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e show cause notice has not explicitly made the charges of any ingredients such as suppression of fact, mis-declaration, fraud, collusion etc. for imposition of penalty under Rule 15(2) of the Rule. Moreover, the show cause notice proposed the penalty only under Rule 15 without mention of Sub-rule (2) of Rule 15 of the rule. For this reason also equal penalty under Rule 15(2) was wrongly imposed. He submits that in view of various Supreme Court judgments it has been held that for invoking the pe .....

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dia -1996 (88) E.L.T. 24 (S.C.) (iii) Kaur & Singh Vs. Collector of Central Excise, New Delhi-1997 (94) E.L.T. 289 (S.C.) 4. On the other hand, Shri Sanjay Hasija, Ld. Supdt. (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that for invoking the penal provision under Section 11AC or Rule 15(2), the period of one year is not relevant, the penalty provision under Section 11AC is independent proviso to Section 11AC(1) of the Act. Therefore, if .....

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) E.L.T. J355 (S.C.)It was held that wrong mention or non-mention or Rule or Section will not vitiate the show cause notice. He submits that the appellant has willfully intended to wrongly utilize the Cenvat Credit therefore the penalty under Section 11AC/Rule 15(2) was correctly and legally imposed on the appellant. 5. I have carefully considered the submissions made by both the sides. The only issue to be decided by me is whether the appellant is liable for penalty under Section 11AC of Centra .....

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