2017 (11) TMI 137 - AT - Central Excise

Tribunal upholds decision setting aside penalty for irregular CENVAT Credit

The Tribunal dismissed the Revenue's appeal, upholding the Commissioner (Appeals)'s decision to set aside the penalty imposed on M/s Kalinga Commercial ... CENVAT credit - Commissioner (Appeals) observed that the assessee had paid the required demand alongwith interest and reduced penalty within the stipulated time. The Commissioner (Appeals) set aside the penalty on the ground that the assessee had not willfully made any mis-statement or suppressed facts or violated any provision of the Act or Rules with on intent to evade payment of duty - Held that: - I do not find any material to establish malafide intent on the part of the respondent - order of the Commissioner (Appeals) upheld - appeal dismissed - decided against Revenue. Issues:1. Irregular availing of CENVAT Credit by the assessee.2. Confirmation of demand by the adjudicating authority.3. Reduction of penalty by the Commissioner (Appeals).4. Appeal by the Revenue before the Tribunal.5. Tribunal's decision on the appeal.Analysis:1. The case involved M/s Kalinga Commercial Corporation, a service provider of Mining Service, who wrongly availed CENVAT Credit of excise duty and Service Tax without furnishing the required duty paying documents. A Show Cause Notice was issued for the recovery of the irregularly availed credit amounting to &8377; 43,30,646/-.2. The adjudicating authority confirmed a demand of &8377; 29,37,07/- along with interest and penalty. The amount, already paid by the assessee, was appropriated towards the tax liability. The assessee was given an option to pay a reduced penalty of 25% of the imposed penalty, i.e., &8377; 7,34,777/-, provided the demand along with interest and penalty was paid within 30 days.3. The Commissioner (Appeals) noted that the assessee had paid the required demand, interest, and reduced penalty within the stipulated time. The penalty was set aside by the Commissioner (Appeals) based on the lack of willful misstatement or intent to evade duty payment. This decision led to the Revenue appealing before the Tribunal.4. Upon hearing both sides and reviewing the records, the Tribunal found no material establishing malafide intent on the part of the respondent. Consequently, the Tribunal decided not to interfere with the Commissioner (Appeals)'s order.5. The Tribunal dismissed the appeal filed by the Revenue, deeming it devoid of merits. The judgment was dictated and pronounced in the open court, affirming the decision in favor of the respondent and upholding the Commissioner (Appeals)'s ruling on the penalty issue.