Tribunal grants interest appeal, imposes penalty for wrong credit availment.

The tribunal allowed the appeal for interest under Rule 14, directing the respondent to pay Rs. 9,558. Regarding the penalty under Rule 15, the tribunal partially allowed the Revenue's appeal, imposing a penalty of Rs. 2,000 under Rule 15(3) for the wrong availment of credit. The penalty imposed by the original authority was set aside due to a "simple bona fide mistake."

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Issues: Determination of interest under Rule 14 of CENVAT Credit Rules, 2004 and imposition of penalty under Rule 15.

Analysis:

Interest under Rule 14:
The Department appealed to determine if the respondent should pay interest on wrongly availed CENVAT credit. The original authority demanded interest and imposed a penalty equal to the reversed credit. The Appellate Authority set aside the penalty. The Department argued for interest citing UOI v. Ind-Swift Laboratories Ltd. The respondent conceded liability for interest. The tribunal allowed the appeal for interest, and the respondent was directed to pay Rs. 9,558.

Penalty under Rule 15:
The show cause notice proposed a penalty for the wrong availment of CENVAT credit under Rule 15. The notice invoked sub-rule (3) of Rule 15 for a maximum penalty of Rs. 2,000. However, the original authority imposed a penalty equal to the credit amount under sub-rule (4). The Appellate Authority set aside this penalty due to a "simple bona fide mistake." The tribunal noted the discrepancy in invoking sub-rule (4) beyond the notice's scope. The tribunal ordered a penalty of Rs. 2,000 under Rule 15(3) for the wrong availment of credit, partially allowing the Revenue's appeal.

In conclusion, the respondent was directed to pay interest of Rs. 9,558 under Rule 14 and a penalty of Rs. 2,000 under Rule 15(3) of the CENVAT Credit Rules, 2004.

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