Tribunal upholds extended period for Cenvat Credit demand, interest from credit entry, penalty for suppression of fact

The tribunal upheld the extended period's invocation for the demand of Cenvat Credit, citing lack of disclosure before audit. The interest demand under Section 11AB was upheld from the date of credit entry, not utilization. The penalty under Section 11AC was imposed due to suppression of fact, with the tribunal emphasizing the mandatory nature of the penalty, dismissing the appeal and affirming the penalty imposition.

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Issues:
1. Contesting the invocation of the extended period for demand of Cenvat Credit.
2. Disputing the demand of interest under Section 11AB.
3. Challenging the imposition of penalty under Section 11AC.

Extended Period Invocation for Cenvat Credit Demand:
The appeal challenged the extended period's invocation for the demand of Cenvat Credit. The appellant argued that there was no suppression of fact on their part, emphasizing their accumulated Cenvat Credit balance exceeding Rs. 4 crores, suggesting no malicious intent in availing a small amount wrongly. However, the Revenue contended that the audit revealed the wrongful credit availment, indicating suppression by the appellant. The tribunal upheld the extended period's invocation, considering the lack of disclosure before the audit, concluding that the demand of Cenvat credit was sustained.

Demand of Interest under Section 11AB:
Regarding the interest demand, the appellant claimed interest should only apply from the date of credit utilization, not from when it was taken in the Cenvat account. The tribunal referred to Rule 14 of the Cenvat Credit Rules, stating that interest is chargeable from the date of credit entry. The appellant tried to distinguish a Supreme Court judgment, but the tribunal held that the interest is indeed chargeable from the date of credit entry, dismissing the appellant's argument and upholding the interest demand.

Imposition of Penalty under Section 11AC:
The appellant contested the penalty imposition under Section 11AC, citing their belief in good faith due to the substantial accumulated Cenvat Credit balance. However, the Revenue argued that clear suppression of fact existed, justifying the penalty. The tribunal upheld the penalty, stating that the extended period invocation and demand confirmation warranted penalty imposition under Section 11AC, following the precedent that this penalty is mandatory and cannot be waived or reduced. Thus, the tribunal dismissed the appeal, affirming the imposition of the penalty under Section 11AC.

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