2014 (1) TMI 1650

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....ported melted flux against Bill of Entry during the relevant period, 2007-08. Later, the appellant had filed an insurance claim against short receipt of the goods, which included the CVD portion of duty, on which they had availed the Cenvat credit. Consequently, the insurance claim was received by the appellant, but, the proportionate Cenvat credit of CVD, attributable to the short receipt of the goods, had not been reversed by the appellant. During the course of audit, the said discrepancy was pointed out and immediately, the appellant had reversed the Cenvat credit of Rs. 1,39,028/- on 17-11-2009 and also paid interest of Rs. 36,780/- on 10-12-2009 by debiting their PLA. A show cause notice was subsequently issued to them on 11-2-2011, in....

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....how cause notice, therefore, no penalty should be imposed under Rule 15 read with Section 11AC of the CEA, 1944, as there was no element of suppression in their case. In support, he has referred to the judgment of the Innovatative Instruments Pvt. Ltd. v. CCE, Vadodara-II - 2008 (232) E.L.T. 460 (Tri.-Ahmd.); and Aditya College of Competitive Exam v. CCE, Visakhapatnam - 2009 (16) S.T.R. 154 (Tri.-Bang.). Further, he has submitted that the Adjudicating Authority has not allowed them the option to pay 25% of the penalty as per Section 11AC of the Central Excise Act, 1944, and the ld. Commissioner (Appeals) has rejected their plea that such exercise of option need not be mentioned in the Adjudication Order. The said observation is contrary to....

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....ceipt of the materials. Since the appellant had availed the Cenvat credit even on the value of the inputs not received, therefore, they had reversed the proportionate credit, attributable to goods not received, on being pointed out by the visiting audit party. From the facts, I find that the appellant had received the insurance claim for short receipt of the goods in their factory, but availed Cenvat credit on the total quantity of the inputs, as shown in the Bill of Entry. So while availing the credit, there might not be irregularity, but continuation of the credit in their books of accounts after filing the insurance claim with the authorities, become irregular, as they knew that the entire quantity of the inputs were not received in thei....

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.... be noted from the decisions mentioned hereinabove, this Court has followed a consistent view that the assessee is required to be given the option by the adjudicating authority where he is asked to pay a duty demand with interest and 25% of penalty within 30 days from the date of adjudication of the order and in such case, he would be liable to pay only 25% of the penalty. Whenever such option had not been given, the remand had been made to the concerned authorities. And period of 30 days is being considered, if in case option is not given earlier, from the date of availing such option. 15. In the present case also, the remand had been made to the Tribunal and in the order of remand, it was also directed to consider the provision of S....