Custom, Excise & Service Tax Tribunal
M/S Deepak Industries vs Cce & St, Raipur on 15 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING : 15/09/2016. DATE OF DECISION : 15/09/2016. Excise Appeal No. 52280 of 2016 (SM) [Arising out of the Order-in-Appeal No. BHO-EXCUS-002-APP-013-16-17 dated 28/04/2016 passed by The Commissioner (Appeals) of Customs, Central Excise & Service Tax, Raipur.] For Approval and signature : Honble Shri V. Padmanabhan, Member (Technical) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair :Seen copy of the order? 4. Whether order is to be circulated to the :Yes Department Authorities? M/s Deepak Industries Appellant Versus CCE & ST, Raipur Respondent
Appearance Ms. Shreya Dahiya, Advocate for the appellant.
Shri M.R. Sharma, Authorized Representative (DR) for the Respondent.
CORAM: Honble Shri V. Padmanabhan, Member (Technical) Final Order No. 53633/2016 Dated : 15/09/2016 Per. V. Padmanabhan :-
The present appeal has been filed against the order dated 28/4/16 passed by the Commissioner (Appeals), Raipur. The appellant is engaged in the manufacture of excisable goods falling under Chapter 72 and 73 of the Central Excise Tariff Act and are availing the Cenvat credit facility. The present controversy arose at the time of visit of the Central Excise officers to the appellants unit for purposes of carrying out audit in October 2013. At the time of audit it was observed that inadmissible Cenvat credit to the extent of Rs. 3,56,607/- was availed by the appellant on structural items used for fabrication of support structures for capital goods such as overhead crane, wire drawing machinery etc. On being pointed out by audit, the appellant reversed the disputed amount of Cenvat credit on 16/10/13 and intimated the same to the Department. However, the Department issued a show cause notice dated 08/10/14 covering the period June 2011 to August 2013 proposing disallowance of the disputed Cenvat credit alongwith charging of interest as well as imposition of penalty of the like amount under Section 11A. This show cause notice was issued alleging suppression of facts and invoking the extended period of limitation. The Original Authority vide his order dated 30/4/15 confirmed the demand, interest as well as penalty. When this order was challenged before Commissioner (Appeals), the appellant did not contest the disallowance of Cenvat credit, however, they pleaded that the penalty imposed should be set aside. The interest involved was also paid on 16/10/14. In the impugned order the imposition of penalty was upheld. Hence the matter has travel to this Tribunal.
2. Heard Ms. Shreya Dahiya, learned Advocate for the appellant as well as Shri M.R. Sharma, learned DR appearing for the Revenue.
3. The learned Advocate appearing for the appellant reiterated the appeal grounds. She submitted that the Cenvat credit reversed with interest is not being contested. However she argued that no penalty is imposable on them. In their support, they cited the case laws :-
(i) ITC Ltd. vs. CCE, Salem reported in 2012 (285) E.L.T. 292 (Tri. Chennai) ;
(ii) Diamond Power Infrastructure Ltd. vs. CCE & ST, Vadodara II reported in 2015 (40) S.T.R. 825 (Tri. Ahmd.).
4. The disputed Cenvat credits have been taken on structural material which has been used to fabricate foundation structures for capital goods such as overhead cranes, wire drawing machinery etc. Even though the show cause notice has been issued invoking the extended time limit alleging suppression, the duty amounts alongwith interest stand paid and is not being contested in the present appeal. Hence, I uphold the same. The issue regarding admissibility of Cenvat credit on structural items used in the fabrication of support structures for capital goods have been disputed issue. The issue also stood referred to the Larger Bench in the case of Vandana Global Ltd. vs. CCE, Raipur reported in 2010 (253) E.L.T. 440 (Tri. LB), the issue being disputable no intention to evade payment of duty or denying a wrong Cenvat credit can be attributed to the assessee. This view has been taken by the Tribunal time and again and the views have also been reiterated in the case laws cited by the appellant.
5. It is the argument of the appellant that since they paid the disputed Cenvat credits before the service of any notice as contemplated in Section 11A (a), no show cause notice ought to have been served upon them. They have further submitted that in as much as the interest leviable has also been paid in full, no penalty will be leviable under the provisions of this Act and Rules. The relevant provisions of Section 11A are given below :-
Section 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, -
(a) the Central Excise Officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice ;
(b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of, -
(i) his own ascertainment of such duty; or
(ii) the duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under Section 11AA.
(2) The person who has paid the duty under clause(b) of sub-Section (1), shall inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that sub-Section in respect of the duty so paid or any penalty leviable under the provisions of this Act or the rules made thereunder.
6. It may be noted from the above provisions that once the duty disputed is paid alongwith the interest payable under Section 11(AA), no show cause notice is to be served on the assessee, however, it is to be noted that this waiver of penalty is entitled only in those cases where there is no allegation of fraud, suppression or collusion. In the present case, I find that such allegations have been made in the show cause notice issued to the appellant. However, in the light of the fact that the availment of Cenvat credit on structural items has been in dispute for a long time, allegations of suppression cannot be made against the appellant. Under such circumstances, the benefit of waiver of penalty provided under Section 11A (2) is extendable to the appellant.
7. In line with the above discussions, I set aside the impugned order and allow the appeal.
(Dictated and pronounced in open court.) (V. Padmanabhan) Member (Technical) PK ??
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