Custom, Excise & Service Tax Tribunal
In The Customs, Excise And Service Tax ... vs Commissioner Of Central Excise & St on 28 October, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH AT CHENNAI Appeal No.E/40002/2016 [Arising out of Order-in-Appeal No.325/2015 (CXA-II) dt. 7.10.2015 passed by the Commissioner of Central Excise (Appeals-II), Chennai] Godrej Consumer Products Ltd. Appellant Vs Commissioner of Central Excise & ST, Puducherry Respondent
Appearance:
Shri G.Derrick Sam, Advocate For the Appellant Shri K.P. Muralidharan, AC (AR) For the Respondent CORAM:
Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of Hearing / Decision : 28.10.2016 FINAL ORDER No.42069/2016 Appellant cleared Mosquito Repellants to M/s.Emox Device Company (M/s.Emox, for short) at a price lesser than the certified values of the Cost Accountant. They had received rejected materials, which were neither inputs nor capital goods, from M/s.Emox and availed cenvat credit on the same. Hence a show cause notice dt. 26.12.2012 was issued to the appellant alleging that appellant had imported PTC thermistors under Target Plus Scheme and it had cleared the same as such to Emox without reversing the cenvat credit attributable to such clearances. The total amount of cenvat credit retained by the appellant during the period from December 2007 to January 2009 was Rs.27,82,176/-. Similarly, the SCN alleged that 'mosquito repellant refills manufactured and cleared by the appellant to M/s.Emox were cleared at a lesser CAS-4 value as compared to the CAS-4 value arrived at by the Cost Accountant/Chartered Accountant and the duty short paid on this account during the relevant period was Rs.5,70,367/-. The other issue relates to wrong availment of cenvat credit to the tune of Rs.93,923/- on rejected materials received from M/s.Emox on the ground that they were neither inputs not capital goods. On being pointed out, appellants have paid up the disputed credit amount on various dates between 7.4.2009 and 17.8.2009. The entire duty demand [Rs.34,46,466/-] and interest stands appropriated by the adjudicating authority. Appellants are before this forum against the impugned order only for waiver of penalty.
2. Ld. Counsel submits that in view of their having paid up the disputed amount after being pointed out by department and, in any case, well before the issue of show cause notice on 26.12.2002, the penalty should not be imposed in their case.
3. On the other hand, Ld. A.R refers to para-8 of the OIA and contends that prayer for waiver of penalty should not be acceded to since Section 11AC penalty is consequential and mandatory.
4. Heard both sides and gone through the facts.
5. It is not disputed that appellants have paid up the disputed amounts, albeit in installments, nonetheless, well before issue of show cause notice. The show cause notice alleged willful misdeclaration on the part of the appellant but did not dispute that they had filed ER-1 returns and, in any case, as they had paid up the disputed amount immediately on being pointed out, Section 11A (2B) will apply and hence show cause notice itself should not have been issued. In the event, I find considerable merit in the appeal for waiver of penalty. Penalty of Rs.34,46,466/- is set aside.
Appeal is allowed.
(dictated and pronounced in open court) (MADHU MOHAN DAMODHAR) MEMBER (TECHNICAL) gs 2