2014 (10) TMI 274 - AT - Central Excise

Revenue's Appeal Dismissed: Penalty Dropped under Cenvat Credit Rules. Show-cause notice lacked specificity.

COMMR. OF C. EX., PUNE-III Versus JAMSHRI RANJITSINGHJI SPG. & WEAVING MILLS CO. LTD.

The appeal by Revenue against the dropping of penalty under Rule 13 of Cenvat Credit Rules, 2002 was dismissed. The court held that since the show-cause ... Deletion of penalty under Rule 13 - contravention of provisions of Rule 6(3) of the Cenvat Credit Rules, 2002 - Held that:- On perusal of the record, there is no specific clause of Rule 13 of the Cenvat Credit Rules, 2002 has been mentioned in the show cause notice. In the absence of allegation against the appellant for contravention of specific clause, no penalty is warranted relying on the decision in Raymond Apparel. Therefore, I confirm the impugned order - Decided against Revenue. Issues: Revenue's appeal against dropping of penalty under Rule 13 of Cenvat Credit Rules, 2002.Analysis:1. The Revenue appealed against an order where penalty under Rule 13 was dropped by lower authorities due to duty payment before the show-cause notice. The Revenue contended that the appellant contravened Rule 6(3) of the Cenvat Credit Rules, 2002. The lower authorities held that penalty was not required since duty with interest was paid. The Revenue argued that as per the decision in Rajasthan Spinning & Weaving Mills, penalty under Rule 13 is warranted.2. The advocate for the appellant opposed the Revenue's contention, stating that although credit was taken wrongly, duty was paid before the show-cause notice, and there was no specific mention of contravention of Rule 13 in the notice. Citing Raymond Apparel Ltd. and Amrit Foods cases, it was argued that no penalty was warranted in the absence of a specific clause in the notice.3. After hearing both sides and examining the records, it was noted that the show-cause notice did not mention a specific clause of Rule 13. Relying on the Raymond Apparel case, it was concluded that in the absence of an allegation against the appellant for contravening a specific clause, no penalty was warranted. The impugned order was confirmed, and the Revenue's appeal was dismissed, with a directive for the respondent to pay interest for the intervening period.