TaxTMI 
TaxTMI 
2011 (6) TMI 520
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....hereon and imposed penalty of Rs.10 lakhs on the appellant under Rule 15 of CENVAT Credit Rules, 2004. 2. Brief facts of the case are that the appellant has taken CENVAT credit on the strength of a supplementary invoice issued by M/s. Chennai Petroleum Corporation Limited (CPCL) which evidenced payment of additional duty of excise by M/s. CPCL on LOPS. Against M/s. CPCL, the department has issued a show-cause notice for demanding such additional duty on the goods alleging that the noticee (CPCL) had suppressed material facts with intent to evade duty by invoking extended period of limitation and also proposed to impose penalty under Section 11AC of the Central Excise Act, 1944. While that notice was pending adjudication, M/s....
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....onsequent to the order of settlement Commission, the Commissioner as per order-in-original No. 3/2008 dated 17.03.2008 has dropped the proceedings on the ground that the input-supplier viz. M/s. CPCL had obtained immunity from penalty under the Central Excise Act, 1944 from the Settlement Commission and the said order has not been appealed against by the department. He further submitted that the CENVAT credit has been denied on the ground that the input-supplier M/s. CPCL has short paid by reason of fraud, collusion, suppression of facts, willful mis-statement of facts or contravention of law with intent to evade payment of duty under Rule 9(1)(b) of CENVAT Credit Rules, 2004 is not sustainable in the light of decision of the Larger B....
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....ion of this Tribunal in the case of Essar Steel Ltd. - 2008 (222) ELT 154 (T) which is distinguishable from the present case as the said case was dealt with the custom matters where there was no sale between the parties but transfer of stock internally, moreover the said order was referred to the Larger Bench of this Tribunal in the case of Bosch Chassis Systems (supra) wherein this Tribunal has held that CENVAT credit can be denied in case of suppression, mis-statement and contravention of Act/Rules. In the case of M/s. CPCL, on perusal of the show-cause notice it is clear that the charge against the M/s. CPCL very grave and serious as CPCL and the appellant are related parties wherein M/s. CPCL adopted an arbitrary method of RTP as ....
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....t have relevance in view of the Settlement order issued by the Settlement Commission. In case, such credit was denied, it will be apparently against the very basis and spirit of settlement ordered by the Commission. In other words, a person against whom a show-cause notice was issued was granted immunity whereas the buyer of goods who availed credit is sought to be penalized. This, apparently, is untenable." 7.1 We have seen that in case of Bosch Chassis Systems India Ltd. (supra) which is relied on by both the sides, the Larger Bench of this Tribunal has categorically observed that mere filing of application before Settlement Commission and payment of duty does not amount that the assessee has admitted the charge of fraud, willfu....