2010 (2) TMI 403

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.... imposed penalty of Rs. 98,77,446/- on them under Rule 15(2) of CCR read with Section 11AC of the Act. The appellants do not challenge demand of Rs. 98,73,446/- under Rule 14 of CCR read with Section 11A of the Act which was appropriated in the impugned order. 2. The facts of the case are that the appellants had taken credit in their Cenvat account to the tune of Rs. 98,77,446/- as duty paid on capital goods in June, 2007. This was not backed by any duty paying documents or receipt of capital goods. On the irregularity being pointed out the assessee reversed the credit in September, 2007. Except the education cess to the tune of Rs. 11,691/-, the excess credit taken was not utilized for payment of duty. After due process of law the Commiss....

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....d taken irregular credit by suppression of facts, fraud etc. 4. We have heard the learned counsel for the appellants and the learned JCDR for the respondents. 5. Learned counsel for the appellants reiterated the submission in the appeal that demand of interest was not sustainable in the light of the judgment of the Hon'ble High Court of Punjab & Haryana cited. He has also reiterated the challenge to the penalty in the light of the Apex court judgment in the case of UOI v. Rajasthan Spinning & Weaving Mills [2009(238) E.L.T. 3 (S.C.)]. Learned JCDR relied on a decision of the Hon'ble High Court of Orissa in the case of Ra) Exports v. National Aluminium Co. Ltd. [1996 (87) E.L.T. 349 (Orissa)] in support of the plea that the impugned demand....

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....ervations apply equally to availment of irregular credit provided under Rule 15(2) of CCR. In the absence of a finding of suppression of fact, fraud, etc., on the part of the appellant, with intention to evade payment of duty, we hold that the penalty was wrongly imposed. We vacate the penalty. 7. As regards the payment of interest, in the Maruti Udyog Ltd., case cited by the appellant, it was held that in a case where the assessee had taken modvat credit but had not utilized the same, the assessee was not liable to pay interest. Their Lord ships in paragraph 4 of the said judgment observed as follows: "4. Learned Counsel for the appellant is unable to show as to how the interest will be required to be paid when in absence of availment of....