Custom, Excise & Service Tax Tribunal
M/S. Padmini Vna Mechatronics (P) Ltd vs C.C.E. Delhi on 26 June, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. II
Appeal No. E/60372/2013-EX(SM)
[Arising out of Order-in-Appeal No. 464/SVS/GGN/2013 dated 29.08.2013 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Gurgaon].
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should 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 copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s. Padmini Vna Mechatronics (P) Ltd. .Appellants
Vs.
C.C.E. Delhi .Respondent
.
Appearance:
Shri Ram Chander Choudhary, Consultant for the Appellant Shri G.R. Singh, DR for the Respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) Date of Hearing: 26.06.2015 FINAL ORDER NO. 52052/2015-EX(SM) Per Ashok Jindal:
The appellant is in appeal against the impugned order for setting aside the mandatory penalty under section 11AC of the Act.
2. The facts of the case are that the appellant is a manufacturer of Switches, Valves, copper wire, ICs etc and they are importing certain component for manufacturing of goods for export. During the period 2008-09 the appellant written off certain inputs in their books of accounts as obsolete but did not reversed Cenvat Credit thereon as per Rule 3(5)(b) of the Cenvat Credit Rules 2004. During the course of audit, it was pointed out to the appellant and later on, show cause notice was issued. Before adjudication appellant reversed the Cenvat Credit pertaining to these inputs which have been written off. Later on, these inputs were used by the appellant for manufacturing of final product. Cenvat Credit was again availed by the appellant. But adjudication took place. The reversal of Cenvat Credit was confirmed and equivalent amount of penalty was imposed on the appellant. Aggrieved from the imposition of penalty, appellant is before me.
3. The Ld. Counsel for the appellant submits that although they have written off the said inputs as obsolete in their books of Account and did not reverse Cenvat Credit pertaining to them but later on, these inputs were used for manufacturing of final product which were lying in their factory at the time of audit. Therefore, it is only the procedural lapse by the appellant as these inputs have been used by the appellant for manufacturing of final product. For these procedural lapses penalty under section 11AC is not imposable. He also submits that it is only a situation of revenue neutrality.
4. On the other hand Ld. AR reiterated the findings of the impugned order.
5. Heard the parties. Considered the submissions.
6. In this case although at the time of writing off as obsolete ofinputs in question, the appellant was required to reverse the Cenvat Credit as per Rule 3(5)(b) of the Cenvat Credit Rules 2004. But later on, these inputs have been used by the appellant in manufacturing of final product and these inputs were lying in their factory itself. In these circumstances, I hold it is a situation of Revenue neutrality and appellant has not gained anything by writing of these inputs as obsolete. In these circumstances, I hold that it was only the procedural lapse on the part of the appellant. Therefore, mandatory penalty under section 11AC is not imposable. But for procedural lapse by the appellant, penalty under Rule 27 of the Cenvat Credit Rules 2002 is imposable. Therefore, I impose a penalty under Rule 27 of the Cenvat Credit Rules 2002 to the extent of Rs.5000/-.
7. With these terms appeal is disposed off.
(Dictated and pronounced in the open court)
(Ashok Jindal) Member (Judicial)
Bhanu
2
E/60372/2013-EX(SM)