Tribunal Partially Allows Assessee's Rectification; Upholds 100% Penalty; Rejects Revenue's Application on Demand.

The Tribunal addressed two rectification applications regarding a final order dated 14.07.2020. The assessee's application was partly allowed, clarifying that cenvat credit on inputs is admissible subject to verification. The Tribunal upheld the imposition of a 100% penalty under section 11AC, as the necessary conditions were met. The Revenue's application was rejected, as the Tribunal confirmed that no demand was improperly set aside, and the findings of the Adjudicating Authority were supported due to insufficient evidence from the Department. The order was finalized on 30/09/2022.

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Issues:
Rectification of mistake in final order regarding imposition of penalty under section 11AC and computation of duty by adjusting cenvat credit for the assessee. Alleged error in setting aside demand without considering facts for the Revenue.

Analysis:
1. The judgment involves two rectification applications, one by the assessee and the other by the Revenue, seeking corrections in the final order dated 14.07.2020, which dismissed both the assessee's appeal and the Revenue's appeal.
2. The assessee's application sought rectification on two points: firstly, contesting the imposition of 100% penalty under section 11AC and Rule 25 of the Central Excise Rules, and secondly, requesting consideration of computing duty by adjusting cenvat credit available on inputs used in manufacturing Iron and Steel parts.
3. Regarding the penalty under section 11AC, the Tribunal found that since the demand of duty invoking an extended period of limitation was upheld in the final order, the penalty under section 11AC automatically follows without the need for a separate finding, as the elements required for confirming duty and imposing penalty are the same.
4. The second alleged mistake by the assessee related to the computation of duty by adjusting cenvat credit on inputs. The Tribunal clarified that there is no provision allowing duty to be determined after deducting cenvat credit. However, if duty is payable, the assessee can avail cenvat credit as per the rules and use it to pay the duty, subject to verification.
5. The Revenue's application pointed out an error in the final order where it was claimed that the Tribunal set aside a demand without considering relevant facts. The Tribunal refuted this claim, stating that the concluding paragraphs of the final order did not set aside any demand confirmed by the lower authority. Instead, the Tribunal endorsed the findings of the Adjudicating Authority, as the Department failed to provide concrete evidence to contradict those findings.
6. Consequently, the Revenue's application was rejected, while the assessee's application was partly allowed. A sentence was inserted in the final order to clarify that if the assessee is entitled to cenvat credit on inputs used in manufacturing final products, it shall be admissible subject to verification by the officers.
7. Both applications were disposed of, with the order pronounced in open court on 30/09/2022.

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