2016 (9) TMI 732

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....85. During the verification of the records, it was noticed that the respondents have availed CENVAT credit of service tax paid on the "service tax group resource sharing expenses" under the category of "Business Auxiliary services" and "Business Support Services" as "Input Services" on the basis of the invoices issued by their sister concern i.e. M/s Amara Raja Batteries Ltd., Karakambadi and M/s Mangal Precision Products Ltd (ARBL and MPPL). The total CENVAT credit availed during the period from April, 2009 to February, 2011 was Rs. 31,11,108/- and an amount of Rs. 8,68,833/- was similarly availed during the period from March, 2011 to December, 2011. The respondents were having an understanding with their two sister concerns i.e., M/s Amar....

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..... 31,11,108/-under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. With reference to SCN dated 29.02.2012 (period March, 2011 to December, 2011), the adjudicating authority confirmed and ordered the recovery of irregularly availed / utilized CENVAT Credit amounting Rs. 8,68,833/- involving common sharing expenses during the period from March, 2011 to December, 2011 with interest thereon, imposed penalty of Rs. 2,00,000/- under Rule 15(1) of CENVAT Credit Rules, 2004. 3. Aggrieved by these orders, the appellant filed appeals before the Commissioner (Appeals) who vide Order-in-Appeal dated 07.03.2013, upheld the demands in respect of the period March 2011 to December, 2011; howeve....

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....Commissioner (Appeals) reducing the penalty under Rule 15(1) for period April 2009 to February 2011, read with Section 11AC, as aforesaid is correct in law. 8.    For better analysis of the issue at hand, it would be worthwhile to -reproduce the relevant provisions of Section 11A (2B) of the Central Excise Act, 1944 as it stood during the impugned period before it was amended with effect from 08.04.2011: "(2B) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person, chargeable with the duty, may pay the amount of duty, on the basis. of his own ascertainment of such duty or on the basis of duty ascertained by a Central Excise Officer befo....

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.... him. From the provisions however, it is seen that this facilitation will be available only to those assesses who come with clean hands. The Explanation 1 to Section 11A(2B) ibid clearly disbars the aforesaid option to those cases where the duty was not levied /short levied, not paid/short paid etc., on account of fraud, collusion or any wilful misstatement or suppression of facts. Once these adverse factors are present, the "shall not serve any notice" provision will not apply. By implication, a show cause notice will have to be issued, and since, any of the aspects of fraud, collusion, wilful misstatement or suppression of facts are present, such notice shall necessarily attract the provisions of S 11AC of the Act which mandates penalty t....