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2016 (9) TMI 578 - CESTAT HYDERABAD

2016 (9) TMI 578 - CESTAT HYDERABAD - 2016 (339) E.L.T. 274 (Tri. - Hyd.) - Recovery of interest and imposition of penalty - Rule 15 CCR r/w 11AC of the Central Excise, Act, 1944 - irregular avilment of Cenvat credit - availment of 100% credit on capital goods in the first year - Held that:- it is correct that there is no determination of duty in the order passed by the adjudicating authority. This is because, though the appellants had wrongly availed 100% credit on capital goods in the same fin .....

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s intentional and a determination of duty for the said act of commission or ommission on the part of appellant, the penalty imposed is not sustainable. In this case, there was no demand of duty as the appellant was eligible for 50% credit in the subsequent year. There is no fraud or suppression of facts brought out with intent to evade payment of duty. Therefore, in the absence of determination of duty, the question of penalty under section 11AC does not arise at all. - Decided partly in favour .....

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The availment of 100% credit on capital goods being contrary to the provisions of Cenvat Credit Rules, 2004, the appellants were served with show cause notice dated 05-01-2010. As the appellants could avail 50% of credit in the subsequent year, the demand in the show cause notice was confined to interest and proposal to impose penalty under Rule 15 CCR r/w 11AC of the Central Excise, Act, 1944. After due process of law, the adjudicating authority ordered recovery of interest of ₹ 18,388/- .....

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use notice, the imposition of penalty is unsustainable. That no penalty can be imposed for the demand of interest. She drew support from the judgment laid in Ispat Industries Ltd Vs CCE, Raigad 2012 (275) ELT 456 (Tri-Mum). Against this, the learned AR, Shri H.S. Naskar assailed the findings in the impugned order. He submitted that appellants had violated the condition that only 50% of credit is to be availed on capital goods in a financial year. Therefore the penalty imposed is legal and proper .....

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