Custom, Excise & Service Tax Tribunal
Jindal Steel & Power Ltd vs C.C.& C.Ex, Raipur on 18 December, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-IV Date of hearing/decision:18.12.2015 Central Excise Appeal No.53406 of 2015-Ex (SM) Arising out of the order in original No.BSP/EXCUS/000/COMM/30/2015 29.6.2015 passed by the Commissioner (Appeals), Central Excise, Jaipur. For approval and signature: Honble Mr. S.K. Mohanty, Judicial Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Jindal Steel & Power Ltd. .. Appellant Vs. C.C.& C.Ex, Raipur .. Respondent
Appearance:
Present Shri H.V. Girnikar, C.A. for the appellant Present Ms. Kannu Verma Kumar, Commissioner (A.R.) for the respondent/Revenue Coram: Honble Mr. S.K. Mohanty, Judicial Member Final Order No. 54015/2015 Per S.K. Mohanty:
This appeal is directed against the impugned order dated 29.06.2015 passed by the Commissioner, Customs & Central Excise, Bilaspur.
2. The brief facts of the case are that during the disputed period, the appellant had availed input service tax credit attributable to generation of electricity in the factory. The generated electricity is used captively in the manufacture of final product and a portion is wheeled out/sold by the appellant. Taking of entire Cenvat credit by the appellant was objected to by the Central Excise Department in terms of Rule 6(3A) of the Cenvat Credit Rules, 2004. Consequently, the appellant reversed the Cenvat credit amounting to Rs.49,62,640/-. For denial of such Credit, the Department issued the Show Cause Notice dated 27.06.2013. Pending adjudication of the dispute, the appellant took re-credit of the said amount reversed earlier, on the basis of its own internal auditor's report. Taking of suo-moto credit was disputed by the Central Excise Department. The Show Cause Notice issued in this regard was adjudicated vide the impugned order, confirming the Cenvat demand along with interest. Besides, penalty of Rs.24,81,320/- was imposed on the appellant under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC (1)(b) of the Central Excise Act, 1944. Hence, this present appeal before the Tribunal.
3. Heard the ld. Counsel for both sides and perused the records.
4. In the impugned order, the ld. Commissioner of Central Excise has held that taking of suo-moto re-credit, without waiting for adjudication of the SCN dated 27.06.2013 is not in conformity with the statutory provisions. I concur with such findings recorded in the impugned order. Thus, I am of the view that there is no infirmity in the impugned order, so far as disallowance of Cenvat credit of Rs. 49,62,640/ is concerned.
5. The interest liability in this case has not been computed in the impugned order, owing to the reason that the amount of credit taken suo-moto has not yet been reversed by the appellant. I am of the view that the interest liability can be fastened on the appellant, if there is insufficient balance in the Cenvat account between the dates of taking re-credit and the reversal thereof. Thus, the matter of interest liability will arise in such situation and to be worked out by the original authority on verification of above facts.
6. Regarding imposition of penalty in the impugned order, I find that the appellant had taken re-credit of the Cenvat amount reversed earlier, based on the internal audit observation that the reversal of credit is erroneous in view of the formula prescribed in Rule 6(3A) of the rules. Since, the issue involved in this case relates to genuine interpretation of the statutory provisions and the appellant is not involved in any fraudulent activity concerning fraud, collusion etc., with intent to defraud the Government revenue, I am of the view that imposition of penalty on the appellant is not proper and justified.
7. In view of above discussion and analysis, the following order is passed:-
(a) The impugned order is upheld to the extent of disallowance of Cenvat credit of Rs.49,62,640/-.
(b) The penalty imposed in the impugned order is set aside.
(c) Regarding the interest liability, if any, the same shall be calculated in terms of paragraph 5 above at the applicable rate, which shall be paid by the appellant.
8. The appeal is disposed of in above terms.
(S.K. Mohanty) Judicial Member scd/ 18.12.2015 1