Reduced penalty under CENVAT Credit Rules 2004 due to lack of evidence of intent.

The Tribunal found the penalty imposed under Rule 15(i) of the CENVAT Credit Rules, 2004 excessive and reduced it significantly due to the absence of evidence of intent to evade duty. The appellant's belief in availing CENVAT credit on service tax for outward transportation of goods was deemed unacceptable for the later period after the law had changed. The appeal was disposed of with modifications, reducing the penalty imposed.

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Issues: Contesting penalty under Rule 15(i) of CENVAT Credit Rules, 2004

In this case, the appellant contested the equivalent penalty imposed by the adjudicating authority under Rule 15(i) of the CENVAT Credit Rules, 2004. The appellant did not dispute the demand for duty and interest, which they had already paid before the show cause notice was issued. The appellant argued that there was no willful intent to evade duty and that the penalty was unwarranted as there was no allegation of suppression, fraud, or misstatement of facts to evade duty. The appellant cited a previous Tribunal case to support their argument. The Tribunal noted that the appellant had availed CENVAT credit on service tax paid for outward transportation of goods, believing it to be legitimate. However, the Tribunal found that the appellant's belief was not acceptable for the later period as the law had changed. The Tribunal concluded that the penalty imposed was excessive and reduced it significantly, considering the absence of evidence of intent to evade duty. The appeal was disposed of with modifications to reduce the penalty imposed under Rule 15(i) of CENVAT Credit Rules, 2004.

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