Successful appeal on penalties and interest in Central Excise case

The appeal against penalties under Section 11AC and interest under Section 11AB imposed by the Commissioner of Central Excise (Appeals) was partially successful. The penalty under Section 11AC was set aside as there was no determination under Section 11A(2) for the cenvat credit in question. However, the interest under Section 11AB was upheld, following the Supreme Court's ruling that interest is chargeable from the date of credit taken. One appeal was partly allowed, and the other was dismissed, with the judgment delivered on May 7, 2015.

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Issues:
- Appeal against penalty under Section 11AC and interest under Section 11AB upheld by Commissioner of Central Excise (Appeals)
- Appellant availed inadmissible cenvat credit, reversed it, and paid interest
- Show cause notice issued for penalty under Section 11AC and interest under Section 11AB
- Appellant's argument of inadvertent credit availing and non-utilization
- Revenue's contention of suppressed facts and extended period invocation
- Interpretation of Section 11AC for penalty imposition
- Interest chargeable from the date of credit taken irrespective of utilization
- Decision on two separate appeals regarding penalty and interest demands

Analysis:
The case involved appeals against penalties under Section 11AC and interest under Section 11AB imposed by the Commissioner of Central Excise (Appeals). The appellant, M/s. Force Motors Ltd., Pune, had inadvertently availed inadmissible cenvat credit, which was reversed upon departmental notice, and interest was paid. A show cause notice was issued for the penalty under Section 11AC and interest under Section 11AB. The appellant argued that the credit was availed inadvertently and not utilized, thus penalty under Section 11AC should not apply. The Revenue contended that the appellant suppressed facts and the extended period was rightly invoked.

In the interpretation of Section 11AC, it was noted that the penalty could only be imposed when the duty is determined under Section 11A(2). Since there was no determination under Section 11A(2) for the cenvat amount in question, the penalty under Section 11AC was set aside. However, the interest under Section 11AB was upheld based on the Supreme Court's judgment that interest is chargeable from the date of credit taken, regardless of utilization.

Regarding the two appeals, in one case, where the duty was not determined under Section 11A(2), the penalty under Section 11AC was set aside, while interest was maintained. In the other case, where the duty was determined under Section 11A(2), the penalty and interest were rightly imposed. Consequently, one appeal was partly allowed, and the other was dismissed. The judgment was pronounced on May 7, 2015.

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