2023 (6) TMI 584 - AT - Central Excise

Tribunal remands case for fresh decision on Cenvat Credit dispute, stresses fair hearing and reasoned judgment

Commissioner of Customs Central Excise-Goa Versus Cipla Ltd.

Commissioner of Customs Central Excise-Goa Versus Cipla Ltd. - TMI Issues involved:The judgment involves the recovery of interest on wrongly availed Cenvat Credit, appropriating credit already reversed by the respondent, and the imposability of penalty under Rule 15(2) of Cenvat Credit Rules, 2004 r/w Section 11AC of Central Excise Act, 1944.Recovery of Interest on Wrongly Availed Cenvat Credit:During an audit, it was discovered that the respondent had wrongly availed Input Service Credit of Rs.24,45,094 on input services used for non-excisable goods without maintaining separate accounts. The respondent reversed this amount upon audit notification but did not pay interest on the wrongly availed credit. A show cause notice was issued for the recovery of the reversed amount and interest of Rs.3,49,000. The Adjudicating Authority confirmed the demand, interest, and penalty. However, the Commissioner set aside the order citing lack of reasoning. The Tribunal remanded the matter back to the Commissioner for a fresh disposal, emphasizing the need for a reasoned decision and a fair hearing for both parties.Appropriation of Reversed Credit and Penalty Imposability:The issue also pertains to appropriating the reversed credit of Rs.24,45,094 by the respondent and the imposability of penalty under Rule 15(2) of Cenvat Credit Rules, 2004 r/w Section 11AC of Central Excise Act, 1944. The Adjudicating Authority had confirmed the demand, interest, and penalty, which was set aside by the Commissioner without providing adequate reasoning. The Tribunal emphasized the importance of justice being seen to be done and the need for a reasoned decision. The matter was remanded back to the Commissioner for a fresh disposal with proper consideration of the contentions and findings before arriving at a conclusion.