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of <h1>Appellants succeed as Tribunal cancels unwarranted penalty, providing relief</h1> <h3>HINDUSTAN COCA COLA BEVERAGES PVT. LTD. Versus CCE., MEERUT-II</h3> The penalty imposed under Rules 15(1) and 15(3) of Cenvat Credit Rules, 2004, amounting to Rs. 1 lakh, was contested by the appellants. The Commissioner ... Penalty - Cenvat/Modvat Issues:Imposition of penalty under Rules 15(1) and 15(3) of Cenvat Credit Rules, 2004.Analysis:The appellants appealed against a penalty of Rs. 1 lakh imposed under Rules 15(1) and 15(3) of Cenvat Credit Rules, 2004. The show cause notice proposed a demand of Rs. 1,60,11,655, but the Commissioner dropped the demand and imposed a penalty of Rs. 1 lakh, which the appellants contested. The appellants had reversed amounts on specific dates in respect of input services and exempted products. They argued that a change in law regarding the maintenance of records caused a delay in the reversal of credit. The appellants cited a Tribunal decision to support their case. The Departmental Representative reiterated the Commissioner's findings, stating that the appellants contravened Rule 6 of the Cenvat Credit Rules, justifying the penalty. The Departmental Representative also argued that the case law cited by the appellants was not applicable as they had not voluntarily reversed the credit.Upon review, it was found that the Commissioner dropped the demand and appropriated the amount deposited by the appellants before the show cause notice was issued. The Tribunal noted that the appellants had reversed a meager amount compared to the total Cenvat credit attributed to exempted products. The delay in credit reversal was attributed to a change in record-keeping laws regarding fuel used in manufacturing final products. The Tribunal referenced the appellants' previous case where penalty imposition was deemed unjustified when credit was voluntarily reversed before utilization. The appellants confirmed they had not utilized the reversed amount at any point. Consequently, the Tribunal concluded that since the appellants had reversed the credit before the show cause notice, and the demand was dropped, the imposition of the penalty was unwarranted. Therefore, the penalty was set aside, and the appeal was allowed with consequential relief.
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