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TaxTMI 
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2015 (4) TMI 419
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....ticed by the officers that the appellant having availed CENVAT Credit of Special Additional Duty (SAD) did not reversed the same while removing the components to their co-makers. The amount of SAD involved in this case was reversed by the appellant before the issuance of show-cause notice as also during the pendency of the matter. Show-cause notice was issued to the appellant for appropriation of the amounts paid by them and also for demand of interest and imposition of penalties. Adjudicating authority after following due process of law came to the conclusion that the main appellant as well as other appellants needs to be imposed with penalties and interest also needs to be demanded. 3. Learned Counsel after taking us through show-cause notice, order-in-original and the records would submit that the issue is due to dis-functioning of the computers software wherein the SAD duty was visualized and no provisions were made in system to catch this data and was not considered when the SAP programme were made. It is his submission that this non-indication of payment of SAD was detected by them on 30th May 2006. The said issue was taken up with their office; kept in touch with the softwa....
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.... learned Counsel would submit that the entire issue is of whether the appellant has suppressed any material fact with intention to evade duty. He would draw our attention to the confirmed demands on which he submits that as per Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944, penalties are imposed under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. His submission is that the provisions of Rule 14 of Cenvat Credit Rules, 2004 are not attracted in this case. He would submit that it is the ratio of the judgement of the Tribunal in the case of LG Electronics Pvt. Ltd. (supra). 6. Considered the submissions made at length by both the sides and perused the records. 7. The issue involved in this case whether the main appellant needs to be saddled with duty liability of an amount which is equivalent to the amount of CENVAT Credit availed by them on SAD on the components and parts imported and subsequently cleared to their co-makers for manufacture of colour T.V. 8. Undisputed facts are that the appellants are availing CENVAT Credit of CVD/Central Excise duty and SAD paid by them when they import th....
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....(1) of the Central Excise Act, 1944 invoking extended period by alleging suppression of facts with intention to evade duty. It would be correct on our part to reproduce the entire judgement of the Tribunal which is as under:- "The appellants M/s L.G.Electronics Pvt. Ltd. Are engaged in the manufacture of colour television sets (CTVs). They import various electronic components for the purpose. On import of these inputs, the appellants pay duties of Customs including CVD and SAD leviable under sec. 3 of the Customs Tariff Act, 1975. These inputs are removed to job workers/ancillary units by reversing CVD and SAD paid at the time of import and availed by the assessee in their CENVAT account. During the period March 2006 to September 2006, the appellants short reversed SAD of Rs. 2,12,40,288/- on clearances of the imported inputs to ancillary units for manufacture of PCBs. The authorities had tentatively concluded that the assessee had knowingly short paid such SAD on components. After due process of law, the Commissioner demanded an amount of Rs. 2,12,40,288/- along with applicable interest invoking provisions of rule 14 of the Cenvat Credit Rules, 2004 (CCR) read with Section 11A(1)....
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....erein the appellant, a job worker, had not correctly computed the assessable value of the job worked goods and had short paid duty on clearances of such goods to principal manufacturer. The Apex Court held that the job worker was not liable to pay the duty short paid since the duty liability on the final product was discharged and since credit of duty paid on intermediate products could be availed for the same. In that case, the principal manufacturer and the job worker had not followed the procedure prescribed for removal of inputs to job worker and receive back the impugned goods manufactured by the job worker without payment of duty. It is submitted that the appellants had no reason to resort to evasion of payment of SAD, as it was open to it to remove inputs as such without payment of duty and to get PCBs manufactured by job workers. It was a case of inadvertent omission and the penalty imposed on them was not sustainable. 2.1 The impugned demand was a revenue-neutral exercise since the principal manufacturer was entitled to take credit of the duty paid on the intermediate products. Therefore, short payment of duty on inputs at the time of their removal to job worker and the j....
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....propriate duty on CTVs. Therefore, demand of duty invoking larger period would be barred by limitation. In such a case, demand of interest and penalty would not be sustainable. The case laws cited by the assessee have decided similar disputes in favour of the assessee. The assessee had not utilized the credit short reversed; it did not incur liability to pay interest. 4.1 From the impugned order, we find that the demand of credit to the tune of Rs. 2,12,40,288/- has been confirmed under Rule 14 of CCR; penalty has been imposed under rule 15(2) of CCR read with sec. 11AC of the Act. Rules 14 and 15 of CCR are reproduced hereunder: "Rule 14 - Recovery of CENVAT credit wrongly taken or erroneously refunded - Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and the provisions of section 11A and 11AB of the Excise Act or sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries. Rule 15 - Confiscation and penalty. - (1) If any person, takes CENVAT credit in respect of inputs or capital goods, wr....
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.... account of fraud, willful mis-statement, collusion or suppression of facts, or contravention of any of the provisions of the excise Act or the rules made thereunder with intention to evade payment of duty. We do not find that these provisions are applicable in this case. The impugned order does not find that any inputs or capital goods had been rendered liable to confiscation by the assessee on account of its taking cenvat credit wrongly on account of fraud, willful mis-statement etc. The liability involved in this case relates to credit of SAD which the assessee had not reversed on clearances of inputs violating provisions of Rule 3(5) of CCR during the material period. In the circumstances, we find that the provisions invoked for imposing penalty are also not legally correct. We, therefore, vacate the penalty imposed on the appellants. In the result the appeal filed by M/s L.G.Electronics Pvt. Ltd is allowed." Revenue aggrieved by the said order of the Tribunal preferred Central Excise Appeal No. 108/2012 before the Hon'ble High Court. The Hon'ble High Court has upheld the findings of the Tribunal and dismissed the appeal filed by the Revenue. The ratio as has been laid....