Custom, Excise & Service Tax Tribunal
Superfil Products Ltd vs Commissioner Of Gst&Amp;Cce(Chennai ... on 3 July, 2018
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IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. E/40267/2018
(Arising out of Order-in-Appeal No. 496/2017 (CTA-II) dated
29.12.2017 passed by the Commissioner of G.S.T. & Central Excise
(Appeals-II), Chennai)
M/s. Superfil Products Ltd. : Appellant
Vs.
The Commissioner of G.S.T. & Central Excise, : Respondent
(Chennai Outer Commissionerate) Appearance:-
Shri. R. Ravikumar, Advocate for the Appellant Shri R. Subramaniyan, AC (AR) for the Respondent CORAM:
Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) Date of Hearing/Decision:03.07.2018 Final Order No. 41933 / 2018 Brief facts are that the appellants who are engaged in manufacture of Nylon mono-filament Yarn, were availing the facility of Cenvat Credit of the duty paid on inputs and capital goods as well as service tax paid on input services. During the 2 course of verification of accounts, it was noticed that they have availed credit of duty paid on capital goods on machinery twice during the period April, 2014 and June, 2014 to the tune of Rs. 1,88,712/-. The Department was of the view that the said credit is not eligible and issued Show Cause Notice, proposing to demand the credit along with interest and for imposing penalties. After due process of law, the Original Authority confirmed the demand and interest and imposed penalties. In appeal, the Commissioner (Appeals) taking note of the fact that appellants had reversed the excess availed credit before utilization, remanded the issue to reconsider the confirmation of wrongly availed credit and interest to the adjudicating authority. However, upheld the penalty imposed. Aggrieved by the penalty imposed, the appellant is now before the Tribunal.
2. The learned Counsel, Shri. R. Ravikumar, submitted that the appellant had reversed the credit immediately when the same was pointed out by the Department. The credit was availed twice inadvertently and there was no mala fide intention to evade payment of duty. He relied upon the decision in the case of Commissioner of C. Ex., Madurai Vs. Strategic Engineering (P) Ltd. [2014 (310) E.L.T. 509 3 (Mad.)] and submitted that when the wrongly availed credit has been reversed, the appellant is not liable to pay interest or penalty. He pleaded that the penalty may be set aside. The learned Counsel also relied on the decision of the Tribunal in the case of Nova Petrochemicals Ltd. Vs. Commissioner of C. Ex., Ahmedabad-II, [2017 (49) S.T.R. 125 (Tri. - Ahmd.)]
3. The learned AR, Shri R. Subramaniyan, supported the findings in the impugned order.
4. Heard both sides.
5. The issue for consideration is whether the penalty imposed on the appellant for the excess credit availed, is sustainable or not. It is brought out from the facts placed before me that the appellant has reversed the credit before utilization and that they had enough credit balance in their Cenvat Credit account for the disputed period. The Hon'ble High Court in the case of Strategic Engineering (P) Ltd. (supra) has categorically held that when the credit has been reversed before utilization, the interest or the penalty imposed cannot sustain. Following the same, I am of the view that the penalty is unwarranted and requires to be set aside which I hereby do.
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6. The impugned order, to the extent of imposing penalty, is set aside. The appeal is allowed, with consequential reliefs, if any.
(Dictated and pronounced in open court) (Sulekha Beevi C.S.) Member (Judicial) Sdd