Custom, Excise & Service Tax Tribunal
M/S Nico Extrusion Private Limited vs Cce & St Silvasa on 14 November, 2017
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Appeal No : E/10689, 10690/2017 (Arising out of OIA No. VAD-EXCUS-003-APP-208-209-16-17 dated 22.12.2016 passed by Commissioner (Appeals) of Central Excise, Customs and Service Tax-Vadodara-iii) 1. M/s Nico Extrusion Private Limited 2. Mr. Arun Indermal Mehta : Appellant (s) Vs CCE & ST Silvasa : Respondent (s)
Represented by:
For Appellant (s) : Shri Mahesh Raichandani, Advocate For Respondent (s): Shri K. J. Kinariwala, AR CORAM :
Mr. Ashok Jindal, Hon'ble Member (Judicial) Date of Hearing/Decision: 14.11.2017 ORDER No. 13479-13480/2017 Per : Mr. Ashok Jindal The appellants are in appeals against the impugned orders wherein demand of interest for the intervening period has been confirmed and penalties on both the appellants have been imposed.
2. The facts of the case are that in the year 2006, some search was conducted in the factory premises of the appellants wherein the statutory records was seized, the appellant was not knowing the balance lying in their cenvat credit account. In the month of March 2009, they started availing cenvat credit on the basis of RG-I Register. During the course of Audit in the month of October 2010, it was pointed out that they are not entitled to avail cenvat credit. The appellants immediately reversed the cenvat credit, but did not pay interest. Later on, in the month of October 2013, the show cause notice was issued to the appellants for demand of interest for the intervening period and to impose penalties on both the appellants. The matter was adjudicated demand of interest was confirmed and penalties on both the appellants were imposed. Aggrieved from the said orders, the appellants before me.
3. Ld. Counsel for the appellants submits that during the intervening period, the appellants were having sufficient balance in cenvat credit account, in fact, they have not utilized cenvat credits which was availed wrongly by the appellants. In that circumstances, relying on the case of Commissioner of Central Excise & Service Tax, LTU, Bangalore vs. Bill Forge Pvt. Ltd. 2012 (279) ELT 209 (Kar.), no interest is payable for the intervening period. Ld. Counsel further submits that as the fact of availment and utilization of cenvat credit was in the knowledge to the department, therefore, the show cause notice has been issued to them after a gap of three years. In that circumstances, the penalties are not imposable on the appellants and the extended period of limitation is not invokable. He further submits that in this case, as the record was seized, in that circumstances cannot be alleged the appellants having malafide intention to avail inadmissible credit, therefore, no penalty is imposable.
4. On the other hand, the Ld. AR for the Revenue relied on the decision of the Honble Apex Court in the case of UOI vs. Ind-Swift Laboratories Ltd. 2011 (265) ELT 3 (S.C.).
5. Heard the parties and considered the submissions.
6. For the demand of interest, the Ld. AR relied on decision of the Apex Court in the case of Ind-Swift Laboratories Ltd (supra). In the said case, the facts are the assessee availed cenvat credit on the strength of fake invoices which is not facts of the case in hand. In that circumstances, the decision of Ind-Swift Laboratories Ltd. (supra) cannot be relied to the facts of the case. Moreover, the judgement of Honble Karnataka High Court in the case of Bill Forge Pvt Ltd. (supra) has examined the decision of the Honble Apex Court in the case of Ind-Swift Laboratories Ltd and held that during the intervening period, if there is a sufficient balance in cenvat credit account, the demand of interest is not sustainable. Therefore, relying on the decision of Honble Karnataka High Court in the case of Bill Forge Pvt. Ltd (supra) for the intervening period, the appellant is not required to pay interest.
7. As, it is the fact on record that statutory records of the appellants were seized in the year 2006 itself, and the appellant has not availed cenvat credit on any fake invoices etc. In that circumstances, penalties on both the appellants are not imposable. Moreover, in this case, the fact was in the knowledge to the department for availing inadmissible credit in the month of October 2010 itself but, show cause notices has been issued after three years which is highly barred by limitation. Therefore, penalties on both the appellants are not imposable.
8. In result, the impugned orders qua demanding interest and imposing penalties on both the appellants are set-aside and the appeals filed by the appellants are allowed.
(Dictated & Pronounced in the open court) (Ashok Jindal) Member (Judicial) G.Y. 4 Appeal No. E/10689,10690/2017