2015 (4) TMI 382

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....istrict Satna. It is engaged in the manufacture of cement clinker and cement and is registered with the Central Excise Authorities and is availing the benefit of CENVAT credit in terms of the CENVAT Credit Rules, 2004. During the assessment year in question, petitioner availed of the benefit of capital good CENVAT amounting to Rs. 44,67,572/on rail tracks, 'concrete sleepers' and 'brackets & connectors' used for laying down railway tract from the petitioner's manufacturing unit to the railway yard. It was said that the material so used comes within the definition of "capital goods" as per rule 2(a) of the CENVAT Credit Rules, 2004. 3. It was the case of the assessee respondent before the authorities that in view of the ....

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....ons exercised by the Assessing Officer in imposing penalty. 5. However, refuting the aforesaid, Shri Avinash Zargar invited our attention to Rule 15(2) of the CENVAT Credit Rules, 2004 and argued that in respect of inputs and capital goods penalty can be imposed only if it is found that the benefit of credit is sought on wrong or fraudulent grounds, by making wilful misstatement, collusion or suppression of facts, or in contravension to any of the provisions or statute or Rules framed thereunder with a view to evade payment of duty. It is said that in the present case on a wrong assumption of a legal provisions and heavily placing reliance on a judgment in the case of Aditya Cement (supra) as the benefit was claimed by the petitioner the A....

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....ment of duty." The aforesaid provision clearly contemplates that in cases where the CENVAT credit in respect of capital good has been taken or utilized wrongly on account of fraud, willful misstatement, collusion or suppression of fact or contravention of any provision of the Act or Rules made thereunder, with an intention to evade payment of duty then only penalty is liable to be imposed. In the present case Rajasthan High Court in the case of another manufacturing Unit namely Aditya Cement came to the conclusion that the Railway Track along with locomotive used by a cement factory for the purpose of transportation of its material is indeed a conveyor system and they are entitled to benefit of exemption from payment of duty which was foun....