Custom, Excise & Service Tax Tribunal
Kumar Organics Products Ltd vs Cce, Bangalore on 16 April, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No . 20546 / 2014 Appeal(s) Involved: E/622/2008-SM [Arising out of Order in Appeal 268-2007 dated 30/11/2007 passed by CCE(Appeals), Bangalore] KUMAR ORGANICS PRODUCTS LTD PLOT NO.62, ROAD 3, JIGANI INSUSTRIAL AREA, JIGANI, BANGALORE Appellant(s) Versus CCE, BANGALORE Respondent(s)
Appearance:
Shri B. Venugopal, Advocate For the Appellant Shri R. Gurunathan, Addl. Commissioner(AR) For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Date of Hearing: 16/04/2014 Date of Decision: 16/04/2014 Order Per : B.S.V.MURTHY The appellant was issued a show-cause notice dt. 05/12/2005 for demand and appropriation of the amounts mentioned herein for (i) wrong availment and utilization of CENVAT credit of Rs.9,84,709/- availed on inputs consigned to other unit; (ii) availment of full credit of duty on the inputs received from 100% EOU instead of eligible credit as per the prescribed formula, thereby availing excess credit of Rs.73,744/-; and (iii) also availment of sales tax amount paid by M/s. BPCL instead of taking credit of Central Excise duty resulting in availment of differential ineligible credit of Rs.1,07,781/-. Penal provisions under Section 11AC of the Central Excise Act, 1944 (CEA) and under Rule 25 of the Central Excise Rules, 2002 (CER) read with Rule 13(1) of the CENVAT Credit Rules, 2002 (CCR, 2002) and Rule 15(1) of CENVAT Credit Rules, 2004(CCR, 2004) were also invoked in the said show-cause notice. The respondent had paid the aforesaid wrong availed credits along with interest of Rs.1,17,842/- before the issue of the show-cause notice. The adjudicating authority dropped the proceedings initiated for imposition of penalties. On an appeal filed by the Revenue, the Commissioner(Appeals) modified the Order-in-Original and imposed penalty equivalent to the amount of CENVAT credit demanded under Section 11AC of CEA.
2. The learned counsel on behalf of the appellants submits that the appellants had made mistakes and as soon as the omissions were pointed out, immediately the amounts were paid with interest. It was also admitted by the appellants that it was a mistake. He submits that in the first case where inputs were transferred to the other unit, there is no revenue loss at all since credit was not taken in the other unit. In the normal course credit could have been reversed, invoice issued and other unit could have taken credit and therefore there was no revenue loss. As regards the credit taken in respect of 100% EOU, he submits that it was a mistake committed due to oversight. As regards the availment of credit of sales tax paid instead of Central Excise duty, he submits that this is also a mistake. It can be seen that as regards the first item which is Rs.9,88,419/-, the submission that it was a revenue neutral situation is correct. As regards the other two amounts, such mistakes can happen because of arithmetical errors. Therefore I find that in this case imposition of penalty on the ground of suppression of fact may not be sustained. The learned AR would rely upon the decision in the case of CCE, Delhi-III Vs. Machino Montell (I) Ltd.[2006(202) ELT 398 (P&H)]. I fully agree that once suppression or misdeclaration is established, penalty is mandatory. In this case, the show-cause notice alleged suppression and it was stated that the fact of availment and utilization of CENVAT credit have not been intimated to the Department by the assessee in their monthly ER1 returns or in any manner whatsoever and the same amounts to wilfull suppression with an intention to evade payment of duty. There is no finding clearly that the amounts taken as credit in this case were not part of the total amount of CENVAT credit taken in the ER1 by the assessee in any of the records. Further there is no requirement under the law to intimate to the Department of each and every document on the basis of which credit has been taken. Moreover, there is no indication that the appellant was required to intimate wrong availment of credit. If they were to know that the credit has been wrongly availed and intimated the same, that could have clearly established an intention to evade payment of duty on their part since they would have intimated something which were not required to be intimated. The suppression cannot be alleged in this case since there is no requirement under the law to intimate details of documents on the basis of which credit has been taken. Under these circumstances, the penalty imposed on the appellant cannot be sustained. Accordingly, appeal is allowed with consequential relief if any to the appellant as for as penalty under Section11AC imposed on the appellant.
(Operative portion of the order pronounced in open court) B.S.V.MURTHY TECHNICAL MEMBER Raja.
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