2008 (9) TMI 814 - AT - Central Excise

Tribunal overturns penalty under Central Excise Act due to lack of fraud allegations

The Tribunal set aside the penalty imposed under Section 11AC of the Central Excise Act, 1944, as it was found to be unsustainable due to the lack of ... Penalty - Cenvat/Modvat - Availment of inadmissible Cenvat credit Issues involved:Challenge against waiver of pre-deposit of penalty amount; Interpretation of penalty provisions under Central Excise Act, 1944; Assessment of penalty imposition without specific provisions mentioned.Analysis:The judgment pertains to a stay application challenging the waiver of pre-deposit of a penalty amount imposed by the adjudicating authority and upheld by the Commissioner (Appeals). The Tribunal heard both sides and examined the records. The appellant argued that the penalty imposed did not specify the provisions under which it was imposed, suggesting it might be under Act 11AC of the Central Excise Act, 1944, which may not be applicable based on the circumstances of the case.The Commissioner (Appeals) upheld the penalty, noting that the appellant availed irregular Cenvat credit and failed to provide evidence to support their case against penalty imposition. However, the Tribunal observed that the penalty was imposed under Section 11AC without allegations of fraud or willful suppression, which are prerequisites for penalty under that section. The Tribunal found that during the relevant period, provisions existed for penalty under the Cenvat Credit Rules, 2004 for inadmissible credit, but the situation did not warrant penalty under Section 11AC of the Central Excise Act, 1944.Therefore, the Tribunal concluded that the penalty imposed under Section 11AC was unsustainable and set it aside, allowing the appeal in that regard. The judgment highlights the importance of specific allegations and evidence for penalty imposition under relevant provisions, emphasizing the need for compliance with the statutory requirements for penalties in tax matters.