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of <h1>Tribunal Reduces Penalty to 25% for Reversed CENVAT Credit with Interest, Favoring Appellant in Appeal Decision.</h1> <h3>M/s. Mihar Alloys Private Limited Versus Commissioner of Central Excise and Service Tax</h3> M/s. Mihar Alloys Private Limited Versus Commissioner of Central Excise and Service Tax - TMI Issues:The appeal against penalty under Rule 15(2) of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944.Facts of the Case:The appellant had taken CENVAT Credit based on fake invoices issued to two companies. During investigation, it was revealed that the invoices were fake and no goods were actually moved. The appellant admitted to taking the credit but reversed it along with interest upon discovering the issue.Adjudication and Appeal:The CENVAT Credit was deemed inadmissible and recoverable from the appellant with interest. A penalty was also proposed. The penalty was confirmed under Rule 15(1) of the CENVAT Credit Rules, 2004. The Revenue appealed for a penalty under Rule 15(2) of the CENVAT Credit Rules, 2004, which was allowed, resulting in a penalty of Rs. 32,65,803. The appellant appealed against this decision.Appellant's Argument:The appellant argued that since they had reversed the CENVAT Credit along with interest, no penalty should be imposed. They cited relevant case law to support their contention.Decision and Rationale:The Tribunal noted that the appellant had admitted to taking credit based on fake invoices, which were later reversed with interest. The Tribunal differentiated this case from previous cases where CENVAT Credit was denied. The penalty was reduced to 25% of the amount involved, as the appellant had already reversed the credit along with interest. The appeal was disposed of accordingly.Conclusion:The penalty imposed on the appellant was reduced to 25% of the amount involved, as they had already reversed the inadmissible CENVAT Credit along with interest. The appeal was decided in favor of the appellant.
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