TaxTMI 
TaxTMI 
2010 (9) TMI 1046
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.... 22nd July, 2009 disallowed the Cenvat credit upto Service Tax and ordered recovery of Rs. 5,07,564/- along with interest and equal amount of penalty, besides penalty of Rs. 1,50,000/- upon the Director of M/s. Atul Generators (P) Ltd. 5. The contention of the Department was that, the appellants had wrongly availed the Cenvat credit, whereas it was the defence of the appellants that whatever amount stated to have been wrongly availed as Cenvat credit has already been reversed by the appellants. The adjudicating authority thereupon passed the said order dated 22nd July, 2009 which reads thus : "I have carefully gone through the records, brief facts of the case, allegation contained in the show cause notice, defence reply and record of personal hearing held on 29-8-2008. And I find that the following issues in the case are to be decided on merits. 1. Whether inadmissible Cenvat credit of service tax amounting to Rs. 5,07,564/- is liable to be recovered from the party under rule 14 of Cenvat credit Rules, 2004 read with Section 11A(1) of the Central Excise Act, 1944 by way of invoking the extended period. 2. &....
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....s raised their objection based on records and there is nothing that department discovered or audit objected to beyond what was already recorded is also not tenable in as much the fact of sale of electricity to other unit was never disclosed to the department. As regard audit objection based on record, the same was pointed out in the unit of M/s. Atul Engg. Udyog not in the unit of M/s. Atul Generators (P) Ltd., Nunhai, Agra. Therefore, it is not correct to say that nothing has been suppressed. I further observe that the party deliberately and knowingly suppressed the material fact from the department with a mala fide intention to avail inadmissible credit and to mis-utilize the same to defraud the govt's legitimate revenue, hence to recover the inadmissible credit, extended period of limitation under Section 11A(1) of Central Excise Act has rightly been invoked. Accordingly I hold that credit of Rs. 5,07,564/- wrongly availed and utilized by the party on account of service tax paid on transportation of CNG used in the manufacture of electricity which was sold out to other units is inadmissible and is liable to be recovered under Rule 14 of Cenvat Credit Rules, 2004 read with ....
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....nts had, in fact, reversed the credit of an amount more that what was demanded under the impugned order etc. The Commissioner (Appeals), however, disposed of the matter holding thus : "For speedy disposal of appeal, I take up the stay application/delay condonation along with appeal together. I have carefully gone through the records, brief facts of the case, allegation contained in the show cause notice, defence reply and I find that the following issues in the case are to be decided on merits : 1. Whether inadmissible Cenvat credit of service tax amounting to Rs. 507564/- is liable to be recovered from the appellant under rule 14 of Cenvat credit Rules, 2004 read with Section 11A(1) of the Central Excise Act, 1944 by way of invoking the extended period. 2. Whether interest is liable to be recovered from the appellant under rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944. 3. Whether penalty equal to the amount of Service tax credit wrongly availed and utilized; is liable to be imposed under rule 15(2) Cenvat Cr....
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.... the department with a mala fide intention to avail inadmissible credit and to mis-utilize the same to defraud the Govt's legitimate revenue, hence to recover the inadmissible credit, extended period of limitation under Section 11A(1) of Central Excise Act has rightly been invoked. Accordingly I hold that credit of Rs. 5,07,564/- wrongly availed and utilized by the appellant on account of service tax paid on transportation of CNG used in the manufacture of electricity which was sold out to other units is inadmissible and is liable to be recovered under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A(1) of Central Excise Act, 1944. The party is also liable to pay interest under Section 11AB of the Central Excise Act, 1944. As far as imposition of penalty is concerned, I observe that the appellant has deliberately suppressed the material facts and intentionally taken the inadmissible credit of Rs. 5,07,564/- though they knew that they were not entitled to avail and utilize the credit of service tax paid on transportation of CNG used in the production of electricity sold out to other units. Therefore, I hold that they are liable to penal action under Rule 15(2) Cenvat....