TaxTMI 
TaxTMI 
2017 (8) TMI 101
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....the process of audit, it came to the notice that they had opted for area based exemption. There was another unit of the appellant on which no exemption was availed. A common boiler was supplying steam to both the exempted as well as non exempted unit. Furnace oil was being used as an input in said boiler. It came to the notice that the appellant had failed to intimate both the stock of furnace oil lying in stock and these goods contained in finished goods on the date of opting for exemption. It was also pointed out that they were not entitled to avail Cenvat Credit on furnace oil for manufacture of exempted and non-exempted goods. Further, they were not maintaining separate accounts for the furnace oil but were maintaining the separate reco....
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....y of only Rs. 1,00,000/- and not the equivalent penalty. He stressed that the adjudicating authority had taken a lenient view and the same implies that the elements of mandatory penalty were not present and hence extended period could not be applied. He further contended that had they reversed proportionate Cenvat Credit, the reversal would have been much less. He also stated that they were maintaining the separate accounts for supply of steam from which the furnace oil consumption for each factory could be worked out and this fact was in the knowledge of the Department, which is evident from the Departments comments at Page 125 to 127 of the Paper Book. Ld. Advocate also pointed out that the Ld. Commissioner (Appeals) had relied upon the j....
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....005 to 31.1.2007 and non reversal of credit of Rs. 1,85,611/- on opting for exemption. I find that the reversal of the credit was not done voluntarily but it was done after it was detected and pointed out by the audit. 6.1 As rightly pointed out by Ld. Advocate, in the show cause notice, there is no allegation of suppression or other elements required for extended period nor is there express invocation of extended period. The Ld. Commissioner has upheld the demand of interest on the basis of CESTAT judgment in the case of Hindustan Insecticides Ltd. vs. CCE-2012 (286) ELT 208 (Tri.Del.) in which it was held as below: "Demand - Limitation - Interest liability - It is determined by Department under Section 11A(2) of Central Excise Act, ....
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....has referred to the decision of the Supreme Court in Commissioner of Trade Tax, Lucknow v. Kanhai Ram Thekedar - 2005 (185) E.L.T. 3 (S.C.). The said decision arose out of proceedings initiated under the U.P. Sales Tax Act, 1948 (subsequently known as U.P. Trade Tax Act, 1948). After referring to the applicable provisions it was held that levy of interest was automatic under the provisions of the said Act, interest should have been paid voluntarily and by non-payment the respondent therein had become a defaulter. In these circumstances, it was observed by the Supreme Court as under :- "17. Thus, we are of the opinion that the High Court was not justified for deleting the interest levied by the authorities on the ground that no noti....
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....e assessment order, a limitation period of three years is laid down. Since the demand of interest was made after almost four year, we hold that the demand is not within a reasonable period and the assessee is not liable to pay the interest as demanded. The Department is not entitled to recover the interest from the assessee-respondent but is at liberty to recover the amount of interest demanded from the Assessing Officer concerned who have not taken steps for four years." 14. A reading of the aforesaid paragraph would show that in the said case notice of payment for interest was issued after four years and it was held that it was beyond a reasonable period and the department could recover the amount from the Assessing Officer, who had no....