Customs, Excise and Gold Tribunal - Ahmedabad
Parle International vs Cce on 28 May, 2007
Equivalent citations: 2007(119)ECC281, 2007ECR281(TRI.-AHMEDABAD)
ORDER M. Veeraiyan, Member (T)
1. This appeal is against the order of Commissioner (Appeals) No. KU/110/VAPI/2006, dt.22.3.06.
2. Heard both sides.
3. The relevant facts, in brief, are as follows:
a) The appellant is manufacturer of Pet Preform, purchased Poly Ethylene Terephthalate (Pet.) Resins, which is one of the raw material from M/s South Asian Petrochem Ltd.
b) The 100% EOU ought to have paid duty @ 19.6%, but the recipient of the raw material was not eligible for entire 19.6%, but only at 9.6 %. The 100% EOU who supplied the input, prepared the invoices indicating 16% rate of duty which are applicable to any unit in DTA.
c) The original authority held that in as much the appellants have received the input from 100% EOU and since they have not taken precaution as envisaged in Rule 7(2) of the Cenvat Credit Rules, they are liable to duty and penalty equal to duty evaded.
d) The Commissioner (Appeals) have also concurred with the findings of original authority.
4. Learned authorized representative for the appellant firm submits that they have gone by the invoices raised by 100% EOU indicating the rate of 16% and accordingly availed full duty as credit. This was a wrong practice followed by 100% EOU who were supplier of the raw material. There was no deliberate intention on the part of the appellant to avail ineligible credit. They have reversed the entire credit promptly when the facts were brought out in the investigation. He is not disputing reversal of the excess credit taken. He seeks waiver of penalty.
5. Learned DR reiterates the findings of Commissioner (Appeals).
6. I have carefully considered the submissions made from both sides. It is noticed that 100% EOU, who ought to have paid duty @ 19.6% chose to pay duty @ 16% which is applicable to clearances from DTA unit. Under these circumstances, it is possible that recipient was genuinely under the impression that they were getting from a DTA unit and are eligible for full credit. No evidence about the knowledge on the part of the appellant that they were procuring from 100% EOU, has been brought out. Therefore, the benefit of doubt that they were not knowing that the supplying unit was a 100% EOU, has to be given to the appellant. Therefore, I do not find any justification for imposition of penalty. The duty required to be paid has already been paid before issue of show cause notice.
7. In the light of the above, the penalty imposed is set aside and appeal is allowed.
(Dictated and Pronounced in Court)