Custom, Excise & Service Tax Tribunal
M/S Gkn Driveline India Ltd vs Cce, Delhi-Iii on 6 January, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH-160017
SINGLE BENCH
COURT NO.1
Appeal No. E/1229/2010
[Arising out of the Order-in-Appeal No. 123/MA/GGN/2010 dated 16.03.2010 passed by the CCE (Appeals), Delhi-III]
Date of Hearing/Decision: 06.01.2017
For Approval & signature:
Honble Mr. Ashok Jindal, Member (Judicial)
M/s GKN Driveline India Ltd. Appellant
Vs.
CCE, Delhi-III
Respondent
Appearance:
Sh. Amrinder Singh, Advocate- for the appellant Sh. V. Gupta, AR- for the respondent , Coram:
Honble Mr. Ashok Jindal, Member (Judicial) Final Order No : 60056 / 2017 Per Ashok Jindal:
The appellant is in appeal against the impugned order demanding interest and imposing penalty.
2. The facts of the case are that the appellant is engaged in the manufacture of motor vehicle parts during the period April, 2006 to March, 2008. The appellant cleared certain inputs as such and at the time of removal of such inputs. As such, the appellant was required to reverse cenvat credit availed on the said goods in terms of Rule 3(5) of the Cenvat Credit Rules, 2004. But inadvertently, the appellant did not reverse cenvat credit pertaining to additional duty of customs (SAD). As soon as, the appellant noticed their mistake, the appellant reversed the cenvat credit on 30.04.2008. Thereafter, a show cause notice was issued to the appellant, demanding interest and imposing penalty on the appellant under Rule 15 (2) of the Cenvat Credit Rules, 2004, read with section 11AC of the Central Excise Act, 1944. The matter was adjudicated, demand of interest and penalty on the appellant was imposed. Aggrieved from the said order, the appellant is before us.
3. The Ld. Counsel for the appellant submits that the impugned order confirmed the demand of interest against the appellant read with Section 11AB of the Act. It is his submission that in the show cause notice there was not proposal for invoking provisions of Rule 14 of the Cenvat Credit Rules, 2004. Hence, the said provisions cannot be invoked at the adjudication stage. He further submits that the Rule 3(5) of the CCR is not applicable for recovery of interest.
4. He further submits that in the light of the decision of this Tribunal in the case of L.G. Electronics pvt. Ltd. reported in 2010 (255) ELT 135 (Tri. Mum.), if the cenvat credit has been reversed before issuance of the show cause notice, the provisions of Rule 14 are not invokable and admittedly in this case, the provisions of Rule, 14 of the CCR, 2004 has not been invoked, therefore, interest cannot be demanded. Consequently, penalty is not imposable on the appellant.
5. Without prejudice, he also submits that the appellant was having sufficient unutilised balance in their cenvat credit account, therefore, in the light of the decision Bill Forge Pvt. Ltd. reported in 2012 (279) ELT 209 (Kar.) interest is not payable and penalty is also not imposable on the appellant, therefore, the impugned order is to be set aside.
6. On the other hand, the Ld. AR reiterated the finding in the impugned order.
7. Heard both sides.
8. Considering the facts that on realisation that the appellant has wrongly availed the credit of SAD has reversed the same. Later on, the show cause notice was issued. In that circumstances, mala-fide intention of the appellants are missing, therefore, no penalty is imposable on the appellant. It is contended by the Ld. Counsel for the appellant that they were having sufficient balance in their cenvat credit, therefore, in the light of decision of Bill Forge pvt. Ltd. (Supra), interest is not payable. The fact that whether the appellant was having sufficient balance in their cenvat credit account or not is to be verified the adjudicating authority, therefore, the matter is remanded back to the adjudicating authority to verify the fact that during the impugned period the appellant was maintaining sufficient balance in their cenvat credit account. If there was sufficient balance in their cenvat credit account, the demand of interest is not sustainable. The adjudicating authority shall consider the arguments of the appellant and after verification. shall pass an appropriate order in accordance with law. Admittedly, no penalty is imposable on the appellant.
The appeal is disposed of by way of remand.
Ashok Jindal Member (Judicial) rt 1 E/1229/2010 GKN Driveline India Ltd. Vs. CCE, Delhi-III