2019 (2) TMI 74 - AT - Central Excise

Court allows Rectification of Mistake applications on CENVAT Credit penalty, imposes interest.

The court allowed the Rectification of Mistake (ROM) applications regarding penalty and interest on CENVAT Credit utilization. The penalty was deleted as ... Rectification of Mistake - case of assessee is that there is no finding on the penalty and Interest - Held that:- It is the settled position of law that an issue involving interpretation, being mired in litigation, etc., cannot lead to suppression or intention to evade payment of duty and cannot also therefore attract penalty. For the above reasons, penalty is deleted - ROM Application allowed. Interest - Held that:- The appellant had utilized a portion of the CENVAT Credit availed for which portion there has to be a liability of interest - it is appropriate to direct the adjudicating authority to compute the interest on that portion of CENVAT Credit utilized by the appellant for the years under dispute - this ground of the ROM applications is treated as allowed in part. ROM Application is disposed off. Issues: Rectification of Mistake (ROM) applications regarding penalty and interest on CENVAT Credit utilization.The judgment pertains to Rectification of Mistake (ROM) applications filed by the assessee regarding penalty and interest on CENVAT Credit utilization. During the hearing, the appellant's advocate highlighted that the ROM applications specifically addressed grievances related to penalty and interest, emphasizing the lack of findings on these issues. The advocate pointed out that relevant arguments were presented during the main appeal, including a specific ground raised and arguments made in the synopsis. The respondent's representative acknowledged the absence of a specific finding on penalty but contended that the appellant had not proven non-utilization of the disputed CENVAT Credit. The appellant's advocate, however, admitted that a portion of the disputed CENVAT Credit had been utilized.The judgment states that while the appellant's argument was noted in the previous order, there was no specific finding on the penalty. It was established that issues involving interpretation and being subject to litigation do not necessarily imply an intention to evade duty, thus not warranting a penalty. Consequently, the penalty was deleted, and the relevant ground of the ROM applications was allowed, leading to a modification of the previous order. Regarding interest, it was found that the appellant had utilized a portion of the disputed CENVAT Credit, necessitating liability for interest on that amount. The adjudicating authority was directed to calculate the interest on the utilized CENVAT Credit for the disputed years. As a result, this ground of the ROM applications was partially allowed, leading to a modification of the previous order accordingly. Subsequently, the ROM applications were disposed of based on the above determinations.