2017 (7) TMI 797

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....earing both sides, I find that the appellants are engaged in the manufacture of Hydraulic systems, which were being cleared by them on payment of duty of Central Excise, after availing Cenvat Credit on various inputs. The appellants also imported capital goods on payment of Customs duty and took credit of the same. The said credit so availed by the appellants was utilised by them for payment of du....

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....r confirmation of the said debit entries made by the appellants as also for imposition of penalty by way of issuance of a show-cause notice dated 06.04.2014. The adjudication proceedings resulted in passing of the impugned orders, imposing penalty of equivalent amount under Rule 15 (2) of the Cenvat Credit Rules, 2004 read with section 11AC of the Central Excise Act. The order also confirmed the d....

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....sible to them, the same was reversed along with interest. The contention of the learned advocate is that payment of interest is penal in character and having suffered interest liability, the penalty imposition upon them was not warranted. Accordingly, he prays for setting aside the penalty. 6. Countering the arguments, learned departmental representative Shri K.P. Muralidharan appearing for the R....

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.... the appellants. 7. After carefully considering the submissions made by both the sides, I find that the assessee is not disputing the fact that the imported Hydraulic system was not at all used by them in their manufacturing activities and was hired out. It is also a fact agreed upon by the learned advocate that such Hydraulic system was imported by them with an intention to lease out the same in....