2014 (1) TMI 1901

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....stomer and the quantity so sold was sent to the customer directly from the port itself. However, no separate invoice was raised for this quantity for having cleared the same from the port to the customer. Instead the appellant showed the quantity sold to the customer as having been received in the appellant's own factory and raised invoices in the name of the customer showing as if the inputs have been cleared from their factory to the customer instead of from the port as was the fact. 2. Proceedings were initiated against the appellant for demanding the Cenvat credit availed on the pet coke which was sold to the customer on the ground that credit could not have been taken without receiving the inputs in the factory. As a result of ....

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....nalty for such a mistake and that too to the extent of Rs. 12,96,486/- is very harsh. 4. The learned AR would submit that the goods have not been received in the factory and therefore credit could not have been taken. Moreover ignorance of law is not an excuse and appellant should have followed the correct procedure and therefore he submits that the demand for duty and imposition of penalty are sustainable in law. 5. I have considered the submissions made by both sides. In this case, admittedly the inputs were not received in the factory but credit was taken. Therefore, credit was not admissible and should be reversed. However when invoices were raised subsequently, the appellants have reversed the credit and therefore seeki....

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....o. The law also does not permit raising of invoice on inputs which have not been received in the factory at all. Appellants have done so. Thus the appellants have neither done justice to their own system which they have adopted for accounting nor have they followed the law which is required to be followed in such cases. That being the position, in my opinion, penalty is required to be imposed even though penalty under Section 11AC could not be imposed. I find that in the show cause notice, the penalty under Rule 15(2) of CCR read with Section 11AC of Central Excise Act, 1944 has proposed. Since one cannot go beyond the proposal in the show cause notice, prima facie, this penalty appears not imposable. Therefore, the requirement of pre-depos....