2018 (12) TMI 924 - AT - Central Excise

Tribunal adjusts denied CENVAT credit, upholds demands, sets aside penalties.

The Tribunal partially allowed the appeal by adjusting the denied CENVAT credit amount with the sum already paid by the appellant. The demands for issues ... CENVAT Credit - MS Sheets used exclusively in the manufacture of exempted PCC pipes - benefit of adjustment of the amount reversed by them - Held that:- The appellant is liable to reverse the CENVAT Credit, however, the amount of ₹ 21,48,550/- already paid by them being over and above the amount of Credit disallowed, the same is required to be adjusted from the amount already reversed as above. Therefore, we deem it fit to remand the matter for the limited purpose of re-quantification of demand on this issue alone after giving adjustment of the amount already reversed by the appellant - there being no suppression of facts, penalty set aside - matter on remand. Classification of goods - MS Specials/Flanges and Tees cleared as pipes falling under Chapter Heading 7305 - Department has alleged that the same are pipe fittings falling under Chapter Heading 7307 - Short payment of duty - appellant had cleared a dutiable final product upon payment as per Rule 6(3)(b) - N/N. 23/2004-CE (NT) dated 10.09.2004 - Held that:- Appellant has conceded the same and the respective demands have already been paid by the assessee. Penalties - Held that:- There is no whisper of any allegation of suppression of facts with intention to evade payment of duty or invocation of any provision pertaining to extended period in the Show Cause Notice - there is no positive evidence to indicate suppression of facts with intention to evade payment of duty and thus the ingredients for invocation of extended period are not present in the case on hand - Penalties set aside. Appeal allowed in part - part matter on remand. Issues Involved:1. Denial of CENVAT Credit on MS Sheets used for exempted PCC pipes.2. Duty on MS Specials/Flanges and Tees.3. Short-paid duty on a dutiable final product.Issue 1 - Denial of CENVAT Credit on MS Sheets:The appellant contested the denial of input service tax credit on MS Sheets alone, arguing that the amount already paid under Rule 6(3)(b) of the CENVAT Credit Rules should be adjusted against the denied credit. The appellant relied on a previous Tribunal decision for a similar issue. The appellant also argued against the imposition of penalties, stating there was no suppression on their part, and they acted in compliance with the rules.Issue 2 & 3 - Duty on MS Specials and Short-paid Duty:The appellant conceded to the demands related to duty on MS Specials/Flanges and Tees and short-paid duty on a final product. The appellant had already paid the necessary amounts for these issues. However, the appellant contested the penalties imposed, claiming there was no malicious intent, and any errors were inadvertent. The appellant argued that penalties were unjustified as there was no evidence of suppression of facts to evade duty payment.The Department supported the findings of the lower authorities, alleging suppression of facts by the appellant. However, the Tribunal found no positive evidence of suppression to invoke the extended period for demands not contested on merits. Therefore, the demands for the extended period were set aside as time-barred. The Tribunal also set aside the penalties imposed due to the lack of evidence of suppression of facts.In conclusion, the Tribunal partially allowed the appeal by adjusting the denied CENVAT credit amount with the sum already paid by the appellant. The demands for issues 2 and 3 were upheld as conceded by the appellant. The penalties imposed for all issues were set aside due to the absence of evidence of suppression of facts.