Custom, Excise & Service Tax Tribunal
M/S. Resil Chemicals Pvt. Ltd vs Cce, Bangalore on 12 May, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing: 12/05/2010
Date of decision:12/05/2010
Appeal No.E/622/07
(Arising out of Order-in-Appeal No.88/2007-CE dt. 28/5/2007
passed by CCE(Appeals), Bangalore)
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
Honble Mr. P.Karthikeyan, Member(Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Resil Chemicals Pvt. Ltd.
..Appellant(s)
Vs.
CCE, Bangalore
..Respondent(s)
Appearance Mr. T.M.Subramanian, Advocate for the appellant.
Ms. Joy Kumari Chander, Jt.CDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) Honble Mr. P.Karthikeyan, Member(Technical) FINAL ORDER No._______________________2010 Per M.V.Ravindran This appeal is directed against the Order-in-Appeal No.88/2007-CE dt. 28/5/2007 wherein the ld. Commissioner(Appeals) has confirmed the demand raised against the appellant and also imposed penalties which were not imposed by the adjudicating authority.
2. The relevant facts that arise for consideration, it was alleged that the appellant herein wrongly availed credit on duty paid capital goods / inputs used in their Application Research Centre and Product Development Research Centre. On being pointed out, the appellant reversed the amount of cenvat credit on the ground that the said credit is inadmissible. Since the appellant did not pay the interest thereon, show cause notice was issued for the demand of interest and for imposition of penalties. Adjudicating authority appropriated the amount which was paid and dropped the proceedings in respect of demand of interest and penalty. Aggrieved by such an order, Revenue filed an appeal. The ld. Commissioner(Appeals) in his impugned order has confirmed the demand of interest and also imposed penalty of Rs.10,000/-.
3. Ld. Counsel appearing on behalf of the appellant submits that there is no question of imposition of any penalty as the appellant has never utilized the amount and infact the appellant is eligible for such credit. On a specific query from the Bench, the ld. Counsel submits that appellant has not challenged the order of the ld. adjudicating authority confirming the reversal of the cenvat credit, held as inadmissible. He would submit that the interest liability also would not survive as the appellant had, during the relevant period, had enough balance in their cenvat account.
4. Ld. DR would reiterate the findings of the ld. Commissioner(Appeals) and submit that the appellant has utilized the amount of credit of Rs.21,000/- taken by them and hence is liable to pay the interest. As regards the penalty, he submits that having taken the credit wrongly and utilized the same, they are liable for the imposition of penalty.
5. We have considered the submissions made by both sides and perused the records.
5.1. The issue involved in this case is regarding the imposition of penalty and interest on the amount of inadmissible cenvat credit taken by the appellant.
5.2. On perusal of the records, we find that the cenvat credit taken by the appellant on the capital goods / inputs which were used in the Application Research Centre and Product Development Research Centre, is within the factory premises to the appellant. It is also undisputed that the inputs consumed and the capital goods were used in the factory premises during the relevant period. On being pointed out, the appellant had in fact reversed the amount of cenvat credit as per direction of Revenue officers. It is also undisputed that the appellant had not challenged the said reversal as confirmed by the adjudicating authority.
5.3. We find that though the appellant had not challenged the confirmation of the demand of the duty before the ld. Commissioner(Appeals), he can definitely rely on the finding in the lower authorities order so as to defend the non-imposition of penalty. We are of the considered view that the inadmissible credit which was reversed by the appellant, if would have been challenged and appealed against, appellant could have succeeded. On this factual matrix, we find that the penalty imposed by the ld. Commissioner(Appeals) under the Rule 13 of the Cenvat Credit Rules is not sustainable. The penalty imposed by the ld. Commissioner(Appeals) under Rule 13 is set aside.
6. As regards the interest, from the statement produced by the ld. Counsel, we find that the appellant in fact had utilized the amount of credit taken by them for some month. As they have not challenged the confirmation of the demand, it has to be held that the appellants had utilized the amount and interest liability that arises. In view of this, the interest liability as has been worked out and confirmed by the ld. Commissioner(Appeals) is upheld.
7. In sum, the appeal against the imposition of penalty is allowed and appeal against the interest liability is rejected. Appeal is disposed off accordingly as indicated hereinabove.
(Operative portion of this order pronounced on conclusion of the hearing) (P.KARTHIKEYAN) Member (Technical) (M.V. RAVINDRAN) Member (Judicial) Nr ??
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