2010 (2) TMI 403 - AT - Central Excise

Appellant prevails as Tribunal overturns penalty & interest demands for excess credit without proper documentation.

BILL FORGE PVT. LTD. Versus COMMISSIONER OF C. EX., BANGALORE

BILL FORGE PVT. LTD. Versus COMMISSIONER OF C. EX., BANGALORE - 2010 (256) E.L.T. 587 (Tri. - Bang.) Issues:1. Demand of interest under Section 11AC of the Central Excise Act, 1944 read with Rule 14 of Cenvat Credit Rules, 2004.2. Imposition of penalty under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of the Act.Analysis:1. The appeal challenged an order confirming a demand of interest and imposing a penalty on the appellant. The appellant had taken credit in their Cenvat account without proper documentation, which was later reversed. The Commissioner found the appellant had irregularly taken excess credit and imposed interest and penalty. The appellant contested the interest demand citing legal judgments, arguing that interest was not sustainable. The Tribunal found that the penalty imposed was not justified as there was no evidence of intentional evasion of duty. Citing legal precedents, the Tribunal vacated the penalty.2. Regarding the demand of interest, the Tribunal referred to a legal case where it was held that interest was not payable if the credit was not utilized. Applying this principle to the case at hand, the Tribunal found the demand of interest unsustainable. The Tribunal emphasized the need to strictly implement statutory provisions and follow legal interpretations provided by High Courts. As no goods were identified for the excess credit availed, the Tribunal concluded that the confiscation of goods and penalty provisions could not be invoked. Therefore, the Tribunal vacated the impugned order and allowed the appeal against the penalty and interest demands.This detailed analysis of the judgment highlights the issues, arguments presented, legal precedents cited, and the Tribunal's reasoning leading to the decision to vacate the penalty and interest demands.