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CCE, C & ST, Tirupati Versus M/s Amara Raja Electronics Ltd.

2016 (9) TMI 732 - CESTAT HYDERABAD

Levy of penalty - validity of order of commissioner (appeals) in reducing the penalty - wrong availing of ineligible Cenvat Credit - improper duty paying documents - credit was reversed with interest at the instance of audit party - Held that:- When the said appellate authority is satisfied that it is a clear case of suppression of material facts, he cannot then go beyond the intention of the legislature in Explanation 1 to Section 11A (2B) ibid, and will necessarily have to uphold imposition of .....

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ority imposing penalty equal to duty demanded will stand restored. - levy of penalty restored - Decided in favor of revenue. - E/26725/2013 - Final Order No. A/30651/2016 - Dated:- 27-7-2016 - Shri Madhu Mohan Damodhar, Member (Technical) Sh. Arun Kumar, Authorised Representative for the Appellant. None for the Respondent. ORDER Brief facts of the case are as follows: M/s Amara Raja Electronics Ltd., (the respondent/assessee), are engaged in the manufacture and clearances of "Home UPS/Trick .....

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mara Raja Batteries Ltd., Karakambadi and M/s Mangal Precision Products Ltd (ARBL and MPPL). The total CENVAT credit availed during the period from April, 2009 to February, 2011 was ₹ 31,11,108/- and an amount of ₹ 8,68,833/- was similarly availed during the period from March, 2011 to December, 2011. The respondents were having an understanding with their two sister concerns i.e., M/s Amara Raja Batteries Ltd., and M/s Mangal Precision Products Ltd., for sharing of common expenses in .....

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ansactions, where some common expenditure between both the group companies were shared in between and thus did not appear to qualify as 'input service as defined under Rule 2(l)(ii) of CENVAT Credit Rules, 2004. Hence, two show cause notices dated 29-12-2011 and 29-02-2012 were issued to the respondent. 2. On adjudication, the adjudicating authority vide his Adjudication Order No. 33 & 34/2012-Adjn (CE) ADC dated 27-03-2012, held as follows: With reference to SCN dated 29.12.2011 (period .....

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se Act, 1944. With reference to SCN dated 29.02.2012 (period March, 2011 to December, 2011), the adjudicating authority confirmed and ordered the recovery of irregularly availed / utilized CENVAT Credit amounting ₹ 8,68,833/- involving common sharing expenses during the period from March, 2011 to December, 2011 with interest thereon, imposed penalty of ₹ 2,00,000/- under Rule 15(1) of CENVAT Credit Rules, 2004. 3. Aggrieved by these orders, the appellant filed appeals before the Comm .....

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e instance of audit party before issue of SCN. 4. The department has come in appeal against aforesaid order of Commissioner (Appeals). 5. The department was represented by Sh. Arun Kumar, Learned AR who reiterated the grounds of appeal, and also submitted as follows: i) Respondent assessee had been availing irregular CENVAT Credit of Service tax. This is not disputed in the impugned order. ii) Since the said irregular availment of credit had been done by suppression of facts from Department, pro .....

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issioner (Appeals) reducing the penalty under Rule 15(1) for period April 2009 to February 2011, read with Section 11AC, as aforesaid is correct in law. 8. For better analysis of the issue at hand, it would be worthwhile to -reproduce the relevant provisions of Section 11A (2B) of the Central Excise Act, 1944 as it stood during the impugned period before it was amended with effect from 08.04.2011: "(2B) Where any duty of excise has not been levied or paid or has been short-levied or short-p .....

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cise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of "one year' referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. Explanation 1. - Nothing contained in this sub-section shall apply in a case where the duty was not levied or was n .....

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., on his own realization or on being pointed out by the department officer and by making such recompense shall have the beneficial effect of dispensing with issue of show cause notice to him. From the provisions however, it is seen that this facilitation will be available only to those assesses who come with clean hands. The Explanation 1 to Section 11A(2B) ibid clearly disbars the aforesaid option to those cases where the duty was not levied /short levied, not paid/short paid etc., on account .....

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