Manufacturer penalized for double availing Cenvat credit & incomplete reversal on capital goods. (2)

The tribunal upheld the penalty imposition on a manufacturer for availing Cenvat credit twice on the same invoice and not fully reversing credit on capital goods cleared after use. The appellant's actions were deemed to demonstrate intent to evade payment, leading to the confirmation of penalties under Rule 15(2) of CCR, 2004. The tribunal found the violations of the Act and Rules by the appellant undisputed, justifying the penalty imposition upheld by the lower authorities.

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Issues:
1. Availment of Cenvat credit twice on the same invoice.
2. Short payment of Cenvat credit on capital goods cleared after use.
3. Imposition of penalty for irregular Cenvat credit availed.

Analysis:
1. The appellant, a manufacturer of Hydraulic Cylinders, availed Cenvat credit twice on the same invoice in June 2014. The department issued a show cause notice proposing recovery of irregularly availed credit and imposition of penalties. The appellant admitted the error but argued that they had rectified it upon notification by the department. The adjudicating authority confirmed the demands and imposed penalties under Rule 15(2) of CCR, 2004. The first appellate authority upheld this decision. The appellant contested the penalty imposition, claiming lack of intent to evade payment and sufficient balance in their Cenvat credit account.

2. The departmental representative argued that the appellant's actions demonstrated an intention to evade payment by availing ineligible Cenvat credit and not fully reversing credit on capital goods clearance. The representative contended that the appellant's reversal upon detection did not absolve them of guilt. The tribunal found that the appellant had indeed availed credit twice on the same invoice and had not fully reversed credit on capital goods cleared after use. The tribunal concluded that the appellant's actions evidenced intent to evade payment, justifying the penalty imposition.

3. The tribunal upheld the impugned order, citing the undisputed violations of the Act and Rules by the appellant. It emphasized that the appellant's actions clearly indicated an intent to evade payment by availing irregular Cenvat credit. The tribunal found no fault in the penalty imposition, as the appellant's violations were established beyond doubt. The appeal was rejected, and the impugned order was upheld, affirming the penalties imposed by the lower authorities.

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