Mistaken double CENVAT credit reversed before use does not attract penalty absent intent to evade duty.

Penalty was held not warranted where excess CENVAT credit was taken twice by mistake, reversed promptly after detection, and not utilised. The record showed payment of duty and interest, and the repeated credit entries were treated as a clerical lapse linked to staff change rather than any intent to evade duty. On that basis, the penal provision under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 was not attracted, and the penalty was waived in favour of the assessee.

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Issues: Whether penalty was justified for taking CENVAT credit twice on the same invoices when the excess credit was reversed and the credit had not been utilised.

Analysis: The excess credit arose from a mistake and was reversed after detection. The amount of duty and interest stood paid, and the credit in question had not been utilised. On the facts, the repeated entries were treated as attributable to clerical lapse and staff change rather than an intent to evade duty. In such circumstances, the penal provision was not attracted.

Conclusion: Penalty under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 was not sustainable.

Final Conclusion: The appeal succeeded to the extent that the penalty was waived and the dispute ended in favour of the assessee.

Ratio Decidendi: Where excess CENVAT credit is taken by mistake, promptly reversed, and not utilised, penalty is not warranted in the absence of intention to evade duty.

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