TMI Blog2019 (5) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... ini, AR ORDER PER: DEVENDER SINGH: The brief facts 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ELT 393 (3) JSL Industries Ltd. vs. CCE, Ahmedabad-1999 (109) ELT 31. (4) Emco Ltd. vs. CCE, Mumbai-2011 (272) ELT 136 (Tri.-Mum.) (5) Gammon India Ltd. vs. CCE, Goa-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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Cenvat credit taken by the noticee by Range Superintendent that the fact of wrong availment of Cenvat credit came to the notice of the department. Range Superintendent vide his letter dated 18.02.2005 addressed to the noticee acknowledge the receipt of invoices for the year 2003-04, 2004-05 on the basis of 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly aware of the fact that the assessee was raising the supplementary invoices. In the present case, the Department detected the irregular availment of Cenvat credit on scrutiny of invoices and there is element of suppression. The appellant have also relied upon the judgement of the Tribunal in the case of Gammon India Ltd. vs. CCE,Goa-2002 (146) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of Cenvat credit availed in respect of capital goods received from 100% EOU. The appellants have strongly contested that such wrong availment, was not on account of any malafide on their part. They were admittedly entitled to avail the Cenvat credit in respect of capital goods but the same was restricted to be availed in terms of a formula given in Rule 3 (7) (a) of Cenvat Credit Rules, 2004. As such, it was a case of a wrong computation of Cenvat credit and not a case of availment of ineligible credit so as to invoke the penal provisions of Rule 13 (2). 4. It is also seen that the appellants, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the penalty, as held by the Ld.Member Technical, Shri Devender Singh (OR) the same has to be allowed by setting aside the penalty, as held by the Ld. Member Judicial. (Pronounced in court on 21.2.2018) (DEVENDER SINGH) TECHNICAL MEMBER (ARCHANA WADHWA) JUDICIAL MEMBER Per: Ashok Jindal 9. Heard the parties. 10. The following reference has been made for consideration before me:- Whether the appeal has to be dismissed by upholding the penalty, as held by the Ld. Member (Technical), Shri Devender Singh (OR) the same has to be allowed by setting aside the penalty, as held by the Ld. Member Judicial. 11. The facts and arguments are not repeated for the sake of brevity as the same have already heard and taken on record by the Referral Bench. 12. I find that in this case on pointing out by the Department to the appellant vide letter dt.18.2.2005, the appellant has reversed Cenvat credit on their own which was wrongly taken by them along with interest by 31.3.2005. Thereafter a show cause notice has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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