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2019 (5) TMI 1012

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..... ts of the case are that the appellant manufacture plastic bottles under Chapter 39. During the course of verification of Cenvat documents, purchase invoices of the appellant for the period 1.4.2004 to 31.12.2004 were requisitioned by the jurisdictional Range Officer. On scrutiny of these invoices, it was observed by the Range Officer that the appellant had wrongly availed Cenvat credit on capital goods received from a 100% EOU. The appellant were therefore asked to supply the invoices vide which the Cenvat credit on capital goods was taken by them from start of their unit in July,2003 along with Cenvat register for capital goods for the relevant period. 2. Scrutiny of these invoices, revealed that the appellant had not availed the credit in terms of the formula given in the Rule 3(6) (a) of the erstwhile Cenvat credit Rules, 2002 and Rule 3 (7) (a) of Cenvat Credit Rules, 2004. Thus, the appellant were found to have availed excess amount of credit of ₹ 51,32,892/- during 2003-04 and ₹ 5,00,761/- during 2004-05. A show cause notice was therefore issued proposing recovery of Cenvat credit taken by the appellant along with interest and also proposing a penalty under Rule 1 .....

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..... 2002 (146) ELT 173 (Tri.-Mum.). 4. Ld.AR for the Revenue reiterated the findings in the impugned order of the adjudicating authority. 5. Heard the parties and perused the record as well as written submissions given at the time of hearing. 6. Since the appellant are not contesting the demand and the interest and are only contesting the penalty imposed on them, the order of Ld. Commissioner is upheld in respect of demand and interest thereon. 7. The only question to be decided is whether the appellant are liable to penalty under Rule 13(2) and Rule 15(2) of Cenvat Credit Rules, 2002/2004 respectively. We find that there is no dispute that the appellant had availed irregular credit on account of capital goods received from a 100% EOU. The credit which was taken irregularly is determined to the extent of ₹ 25,66,446/- during 2003-04 and ₹ 30,67,207/- during 2004-05. The question therefore is whether the appellant had intention to evade duty. The appellant have contended that the credit was not taken on ineligible goods and it is not a case of non payment of duty. Hence, there is no suppression of facts with intent to evade duty. This contention of the appellant does not car .....

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..... which Cenvat credit register for capital goods. After the start of verification of Cenvat credit by the department of the noticee vide their letter dated 21.02.05 admitted to have availed excess Cenvat credit on capital goods and undertook to reverse the same. In view of this, the contention of the noticee that they have voluntarily paid the Cenvat credit is wrong. It was only after the department pointed out the irregularity that the noticee has admitted the same and later on deposited the amount of credit wrongly availed by them. So in view of this, the various decision/judgements relied upon by the noticee in their defence is of no help to them. There was a clear suppression of facts with intent to evade duty. If they had any doubt or any intention to determine what should be the extent of credit, the proper course would have been to check up with the department or to inform the department as to what credit was being taken by them. 9. Further, the appellant have argued that in respect of amount deposited by them on 31.3.2005, the duty was to be determined within one year of date of payment. They have not cited any provisions of law to support this contention. However, they have .....

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..... ELT 173 (Tri.-Mum.). This judgment is based on the Tribunal judgment in the case of JSL Industries vs. CCE, Ahmedabad (supra) , which we have already distinguished above. 11. We find that in the case of Mehta & Co. -2011 (264) ELT 481 (SC), the Hon ble Supreme Court has held that from the date of the knowledge of the Department, the show cause notice can be issued within a period of five years. In this regard, the decision of the Hon ble Supreme Court in para 24 is reproduced below: 24. The cause of action, i.e., date of knowledge could be attributed to the appellant in the year 1997 when in compliance of the memo issued by the appellant and also the summons issued, the hotel furnished its reply setting out the details of the work done by the appellant amounting to ₹ 991.66 lakhs and at that stage only the department came to know that the work order was to carry out the job for furniture also. A bare perusal of the records shows that the aforesaid reply was sent by the respondent on receipt of a letter issued by the Commissioner of Central Excise on 27-2-1997. If the period of limitation of five years is computed from the aforesaid date, the show cause notice having been .....

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..... nts, vide their letter dated 21.02.2005, themselves brought the above fact to the notice of the Revenue and sought to reverse the excess availed credit in 20 equal monthly instalments. The Revenue s contention that the said reversal was on account of a letter written by them on 18.02.2005, cannot be appreciated in as much as on going through the said letter, I note that the same only requires the assessee to supply the Cenvat credit register for capital goods maintained by them. No discrepancy stands pointed out in the said letter of the Revenue. On the contrary, I note that in their letter dated 31.03.2005, they have themselves brought it to the notice of the Revenue that the amount of credit taken by them was in excess in respect of capital goods received from 100% EOU. 5. In the above scenario, it cannot be held that the appellant was having any malafide intention to avail excess payment. Even if the said letter is not taken into consideration, the excess availment of credit was availed by reflecting the same in the credit account and as such cannot be attributed to any malafide. In my views it is a simple mistake of wrong computation of Cenvat credit and in the absence of any p .....

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