9911796707
TMI Blog2022 (11) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of penalty imposed under Rule 15(2) of the Cenvat Credit Rules, 2004. The entire amount of inadmissible credit was deposited by them along with interest prior to issuance of show cause notice. He submits that in similar circumstances in their own case vide final order No.A/86912/2019 dated 03.05.2019 the Tribunal has allowed relief to them. 2.3 Learned AR has no objection to the application made except stating that this appeal is of 2015 and the early hearing application in the present case has been filed in 2022. Such delayed application for early hearing may not be justified because the appeal itself may come up for final hearing in due course. 3.1 We have considered the submissions made by both sides. 3.2 We find that there are sufficient reasons to allow the early hearing application in the present case and we allow the same. 4.1 With the consent of both sides, the appeal has also been taken up for hearing as the issue involved is in a very narrow compass and with respect to the penalty only. 4.2 This appeal is directed against Order-in-Original No. PUNEXCUS- 002-COM-013-14-15 dated 31.03.2015 passed by the Commissioner of Central Excise, Pune-II, by which the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriation of an amount of Rs. 7,80,711/- already paid by the assessee as interest towards the said demand; 25.6 However, I refrain from imposing any penalty on the assessee, i.e. M/s. L'Oreal India Pvt. Ltd., Chakan, Pune, in respect of the issue discussed in para 23 above, in view of my findings as detailed in paras 23.6 to 23.10 above. 25.7. I further give an option to M/s.L'Oreal India Pvt. Ltd., Chakan, Pune, under the provisions of first proviso to Section 11 AC the Act, to pay 25% of the duty amount as determined in para 25.1 above, as penalty, only if, they pay the entire amount of demand as determined confirmed in para 25.1 above, as well as interest payable thereon, as ordered in para 25.2 above, alongwith 25% of the reduced penalty, as imposed in para 25.3 above, within 30 days of the date of communication of this order." 4.3 Appellant during the period from April 2004 to March 2007 has availed certain inadmissible Cenvat credit on services used for traded goods and raw materials and services used for non-excisable goods. 4.4 Alleging contravention of the provisions of Rule 3(1) of the Cenvat Credit Rules, 2004, a show cause notice dated 26.06.2007 was iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd; (b) Ordered recovery of interest under the provisions of Section 11AB of CEA, 1944, on the amount of demand confirmed and ordered for appropriation of the amount of Rs.7,80,711/- already paid by the assessee as interest towards the said demand of interest; (c) Confirmed the demand of Rs.3,54,04,967/-, attributable to the credit of Service Tax availed by the assessee, during the period from April, 2004 to March, 2007, on the services, which have been utilized commonly for manufacture of excisable goods as well as for traded goods and non-excisable goods, under the provisions of Section 11A(2) of CEA, 1944 read with Rule 14 of CCR, 2004 and also ordered for appropriation of the proportionate reversal of Service Tax amounting to Rs.76,88,567/-, as already done by the assessee, towards the said confirmed demand; (d) Ordered recovery of interest under the provisions of Section 11AB of CEA, 1944, on the amount of demand confirmed above and ordered for appropriation of an amount of Rs.12,13,974/- paid by the assessee as interest towards the said confirmed demand; (e) Imposed penalty of Rs.3,54,04,967/- on the assessee for having failed to reverse the Service Tax credit attribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit Rules, 2004 read with Section 11AC of the Central Excise Act. * There was no fraud, suppression etc. justifying the imposition of penalty under the said rule. * He accordingly prayed for setting aside the penalty imposed on the appellant as per para 25.3 of the impugned order. 5.2 Learned AR reiterates the findings recorded in the impugned order. 6.1 We have considered the impugned order along with the submissions made in appeal and during the course of argument. 6.2 Commissioner has in paras 21 and 22 of his order has observed as follows:- "21. Whether there is any willful suppression of material facts, on the part of the assessee in this case and whether extended period is invokable to demand proportionate reversal of Cenvat credit for the period beyond one year 21.1 In this regards I find that the assessee have, interalia, contended that extended period is not invokable as there was no suppression on their part; that they were under the bona fide belief that the entire amount of Cenvat credit was available to them as it was relatable to their business. 21.2 However, find that in the self-assessment regime the assessee is expected to take utmost care while availi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consequences of the failure to comply with the prescribed requirement is provided by the statute itself, there can be no manner of doubt that such statutory requirement must be interpreted as mandatory.' 22.2 Further, the Hon'ble Supreme Court in the case of UOI Vs Dharmendra Textile Processors - 2008-TIOL-192-SC-LB, while holding that mens rea is not an essential element for imposing penalty for breach of civil obligations, has also observed that "It is delinquency of the defaulter itself which establishes his blameworthy conduct........ without any further proof of the existence of mens rea." 22.3 Thus, once it is established that the assessee has committed a breach of the mandatory provisions, the same would constitute a breach of civil obligation cast upon him and irrespective of existence or non-existence of mens rea, the assessee shall be liable for statutory penalty. In this context the observations of the Hon'ble Supreme Court in the case of Gujarat Travancore Agency, Cochin Vs. C.I.T. -1989 (42) ELT 350 (SC) are quite relevant, wherein the Hon'ble Supreme Court held that-.................Unless there is something in the language of the statute indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax, Rs. 1,50,755/- as Education Cess and Rs. 12,13,947/- as interest even before the issue of show-cause notice. On going through the Order-in-Original, it is found that the Commissioner has stated that the method prescribed under Rule 6(3)(d)(iii) of the Cenvat Credit Rules, 2004 for apportioning common services between dutiable service and exempted services can be taken as a guideline on a rational basis. The appellants are contesting this method of quantification of their liability towards ineligible credit. It is a fact that Rule 6(3)(d)(iii) of the Cenvat Credit Rules was introduced in the Statute Book from 1-4-2007 for apportioning common services between dutiable service and exempted service based on the percentage of sale of finished products. The period involved in the show-cause notice is prior to 1-4-2007. The appellants had paid back the ineligible credit as per work-sheet prepared by them and they contended that the work-sheet was not rejected by the Commissioner but the Commissioner has stated that the appellants have not furnished the basis for quantification of such work-sheet and they failed to produce any documentary evidence in this regard....." 6.4 Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
