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2019 (5) TMI 1012

. HELD THAT:- It is fact on record that the appellant has availed excess credit in terms of formula given in Rule 3(7) (a) of Cenvat Credit Rules, 2004, therefore it is mistake of calculation of availment of Cenvat credit which the appellant has reversed the credit on pointing out by the Department. In that circumstance, the penalty is not imposable on the appellant in the facts and circumstances of the case - the view entertained by the Hon’ble Member (Judicial) is agreed upon. The Registry is directed to place matter before the Referral Bench for further proceedings. - Appeal No. E/2/2009-EX - INTERIM ORDER NO.22/2018, FINAL ORDER NO.60492/2019 - 10-5-2019 - Mrs. Archana Wadhwa, Member (Judicial) And Mr. Devender Singh, Member (Technical) Present for the Appellant: Shri S. Sunil, Advocate Present for the Respondent: Shri A.K. Saini, 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 wa .....

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er, for the period 2004-05, wrongly utilized credit can be alleged only to the extent of ₹ 31,67,487/-. He also argued that since the duty had not been determined within a period of one year of the date of payment of duty, the show cause notice was bad in law and consequently, the penalty also could not be imposed. As the show cause notice was issued after a passage of 3 years after the date on which they reversed the credit taken in excess, the impugned order had to be set aside on the ground of delay in issuance of show cause notice. In support of his contention, be relied on the following case laws: (1) Uniworth Textiles Limited vs. CCE, Raipur-2013 (288) ELT 161. (2) Florida Electricals Ltd. vs. CCE-2004 (168) 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 inte .....

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on capital goods for the period 2003-04 and 2004-05, only then the appellant reversed the credit as only they were in the knowledge that they had taken excess credit. 8. We find that the Ld. Commissioner has correctly appreciated the facts while concluding that there was suppression on part of the appellant in the following para: In their reply to show notice, the notices contested that they voluntarily debited/deposited the wrongly availed Cenvat credit on the capital goods on their own. But this contention of the noticee is not correct. It was only during the verification of 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 not .....

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this, the Tribunal set aside the impugned order in that case and allowed the appeal on limitation. In the present case both extended period and penalty have been duly proposed in the show cause notice. Hence the facts being different, the said case law does not help the appellant. 10. The appellant have also relied upon the case of Emco Ltd. vs. CCE, Mumbai-2011 (272) ELT 136 (Tri.-Mum.). In the said case, the Tribunal has held that period of one year would apply on recovery of interest on supplementary invoices because the department was fully 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 t .....

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position of penalty in terms of the provisions of Rule 13 (2) and Rule 15 (2) of Cenvat Credit Rules. As the detailed facts have already been adverted to in the order of the Ld. Brother, I am not repeating the same so as to avoid redundancy. 3. It is seen that the issue relates to wrong calculation 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 app .....

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r reference to third Member for resolving the dispute. Difference of Opinion 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. (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 been issued to the appellant on 29.5.2005 for appropriation of a .....

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