TaxTMI 
TaxTMI 
2019 (5) TMI 1012
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.... 2. Scrutiny of these invoices, revealed that the appellant had not availed the credit in terms of the formula given in the Rule 3(6) (a) of the erstwhile Cenvat credit Rules, 2002 and Rule 3 (7) (a) of Cenvat Credit Rules, 2004. Thus, the appellant were found to have availed excess amount of credit of Rs. 51,32,892/- during 2003-04 and Rs. 5,00,761/- during 2004-05. A show cause notice was therefore issued proposing recovery of Cenvat credit taken by the appellant along with interest and also proposing a penalty under Rule 13(2) and Rule 15(2) of the Cenvat credit Rules, 2002 and 2004 respectively read with Section 11AC of the Central Excise Act, 1944. The matter was adjudicated and the demand of Rs. 56,33,653/- was confirmed along with interest by the adjudicating authority. The penalty of Rs. 56,33,653/- was also imposed on the appellant under Rule 13(2) and Rule 15(2) of the Cenvat credit Rules, 2002 and 2004. Aggrieved from the order of the adjudicating authority, the appellant have filed this appeal. 3. Ld.Advocate for the appellant submits that they are not contesting the demand of duty and interest and are only contesting the penalty imposed on the appellant. He furthe....
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.... there is no dispute that the appellant had availed irregular credit on account of capital goods received from a 100% EOU. The credit which was taken irregularly is determined to the extent of Rs. 25,66,446/- during 2003-04 and Rs. 30,67,207/- during 2004-05. The question therefore is whether the appellant had intention to evade duty. The appellant have contended that the credit was not taken on ineligible goods and it is not a case of non payment of duty. Hence, there is no suppression of facts with intent to evade duty. This contention of the appellant does not carry much force because the requirement of law under Rule 13(2) and Rule 15(2) of CCR is that if the credit is taken/utilised in respect of the goods for the reason fraud, collusion, wilful misstatement or suppression of facts etc. which means if these elements are present and even if the irregular credit is taken on eligible goods, the penalty can be imposed. Hence, the key question is whether any of these elements is present. The appellant have argued that reversal of excess credit was not done at the instance of the department. They have referred to the Department's letter dated 18.2.2005 claiming that there is no refe....
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....cee in their defence is of no help to them. There was a clear suppression of facts with intent to evade duty. If they had any doubt or any intention to determine what should be the extent of credit, the proper course would have been to check up with the department or to inform the department as to what credit was being taken by them." 9. Further, the appellant have argued that in respect of amount deposited by them on 31.3.2005, the duty was to be determined within one year of date of payment. They have not cited any provisions of law to support this contention. However, they have relied on case law of Florida Electricals Ltd. (supra) in support of their contention. We find that the said case is not applicable as the facts are different because in that case the amount of Rs. 15 lakh was deposited during investigation when the Central Excise officers visited the premises of the Florida Electricals Ltd. While show cause notice was issued and hearing had been held, the Tribunal directed the refund of the deposit made during the investigation on the ground that in the absence of any duty liability. In the present case, the appellant have deposited the duty and have admitted that exc....
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.... compliance of the memo issued by the appellant and also the summons issued, the hotel furnished its reply setting out the details of the work done by the appellant amounting to Rs. 991.66 lakhs and at that stage only the department came to know that the work order was to carry out the job for furniture also. A bare perusal of the records shows that the aforesaid reply was sent by the respondent on receipt of a letter issued by the Commissioner of Central Excise on 27-2-1997. If the period of limitation of five years is computed from the aforesaid date, the show cause notice having been issued on 15-5-2000, the demand made was clearly within the period of limitation as prescribed, which is five years." Applying the above judgment to the present case, the reply of the appellant dt.21.2.2005 was sent on receipt of letter dt.18.2.2005 and show cause notice having been issued on 29.5.2008 was clearly within the period of limitation. 12. The appellant have also relied upon the decision of the Hon'ble Supreme Court in the case of Uniworth Textiles Limited (supra), we find that in that case since the appellant laboured under the very doubt which formed the basis before the Hon'ble S....
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....rary, I note that in their letter dated 31.03.2005, they have themselves brought it to the notice of the Revenue that the amount of credit taken by them was in excess in respect of capital goods received from 100% EOU. 5. In the above scenario, it cannot be held that the appellant was having any malafide intention to avail excess payment. Even if the said letter is not taken into consideration, the excess availment of credit was availed by reflecting the same in the credit account and as such cannot be attributed to any malafide. In my views it is a simple mistake of wrong computation of Cenvat credit and in the absence of any positive evidence to the contrary, cannot invite penal action. 6. Further, it is also noticed that though the appellant had reversed the entire excess availed Cenvat credit by 31.03.2005, the Revenue has taken more than a year to issue SCN upon them. Otherwise also I agree with the appellant that the reversed credit was required to be confirmed within the period of limitation. The proceedings intiated for said confirmation and imposition of penalties after a period of three years cannot be appreciated. Though the appellants are not claiming the refund o....