2024 (2) TMI 813 - AT - Central Excise

Tribunal Overturns Cenvat Credit Demand, Citing Precedent; Drops Penalty and Allows Appeal.

Tawi Chemical Industries Versus Commissioner of Central Excise & Customs

The Tribunal set aside the Order-in-Appeal that had confirmed the demand for inadmissible Cenvat Credit and interest, while dropping the penalty. The ... Availment of inadmissible self credit of Education Cess and S&H Education Cess in contravention of para 2C of the Notification - recovery alongwith interest and penalty - HELD THAT:- The identical issue was considered by this Tribunal in the case of M/S ALU BOND ENTERPRISES VERSUS THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, JAMMU & KASHMIR [2023 (12) TMI 1290 - CESTAT CHANDIGARH], wherein the Division Bench of this Tribunal has held The impugned order cannot be sustained and is accordingly set aside. Since the issue is no more res integra and this Tribunal in the above cited case has held that the impugned order is not sustainable in law; therefore, by following the ratio of said decision in the above cited case, it is held that the impugned order is not sustainable and the same is set aside by allowing the appeal of the appellant - appeal allowed. Issues:The appeal against the Order-in-Appeal regarding demand of inadmissible Cenvat Credit and imposition of penalty.Summary:Issue 1: Demand of Inadmissible Cenvat Credit and PenaltyThe case involved an appeal against an Order-in-Appeal that confirmed the demand of inadmissible Cenvat Credit and upheld the recovery of interest, while setting aside the penalty. The appellant, engaged in manufacturing M.S. Ingots, filed refund claims for the period from October 2010 to March 2011 under an exemption Notification. The Adjudicating Authority found that the appellant had taken inadmissible self-credit of Education Cess and S&H Education Cess, contrary to the Notification's provisions. A show cause notice was issued, resulting in disallowance of the irregularly availed self-credit and imposition of a penalty under Section 11AC of the Central Excise Act, 1944. The appellant appealed, and the Commissioner (Appeals) dropped the penalty but confirmed the demand and interest. The appellant did not appear, but requested the Tribunal to decide the case on its merits. The Tribunal, after hearing the Revenue's arguments and reviewing the grounds of appeal, found that a similar issue had been addressed in a previous case where it was held that the impugned order was not sustainable. Consequently, the Tribunal set aside the impugned order, allowing the appeal of the appellant.Conclusion:The Tribunal set aside the Order-in-Appeal that confirmed the demand of inadmissible Cenvat Credit and interest, while dropping the penalty, based on a previous decision where a similar issue was addressed.