TaxTMI 
TaxTMI 
2023 (9) TMI 63
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....ted their records for the period from January 2013 to December 2013. During the course of audit, the audit officers found that the appellant had availed irregular credit and the entire credit was reversed by the appellant on 30.01.2014. The audit report dated 9.4.2014 observed that "As the assessee had maintained sufficient balance in their cenvat account all along, the assessee was not charged with interest and penalty." However, show-cause notices were issued at a later date as furnished below: Sl. No. SCN No./Date Tax Period Amount Involved Remarks 1 No.04/JIG/ADC/ B1/2016 dt.22.01.2016 January 2013 to December 2013 Rs. 5,60,410/- Reversal of AED credit on as such removal. 2 No.V/87/15/2016 Adjn. dt. 1....
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....312/2022 dated 30.8.2022, upheld the order of the Original Authority by imposing penalty. 2. When the appeal came up for hearing today, the learned Chartered Accountant Mr. Vinayaka Hegde, on behalf of the appellant submitted that the audit parties in their audit report had categorically mentioned that the assessee was not charged with interest and penalty since they had immediately reversed the credit and sufficient balance of credit was available in their records. Therefore, the show-cause notice was irregular and the adjudicating authorities should not have imposed penalty on them as is observed by the audit parties. They also submitted that the Commissioner (A) had also in his Order-in-Appeal No.161- 164/2018 dated 16.2.2018 had clea....
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....o ascertain the correctness of payment of duty, availment of CENVAT credit, etc.. Any shortcomings noticed during the course of Audit, itself cannot be reasoned that the deficiency was due to mala fide intention on the part of assessee " 2.2 Further, reliance was placed on the decision rendered by the Hon'ble High Court of Karnataka in the case of Commr. of Central Excise, Bangalore-I vs. Geneva Fine Punch Enclosures Ltd.: 2011 (267) E.L.T. 481 (Kar.) wherein it has been held that: "6. Further that the entire duty and interest was paid voluntarily on being pointed out. It held that no case for imposing the penalty is made out. The commissioner was in total error in passing the order and imposing the penalty. Under these circumst....
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....s are rightly to be penalised for having availed irregular credit. 4. Heard both sides. The audit officers visited the appellant's unit in the month of January and February 2014 and during the course of audit, they noted that some irregular credit was being availed on certain input services. Irregular credit taken on input services during the period from January 2013 to December 2000 was Rs. 87,811, 4,45,680 and 2,86,271 and these amounts were reversed by the appellant on 30th January 2014. The audit report dated 9/4/2014 admitting the payments made by the appellant stated "as the assessee had maintained sufficient balances in their cenvat account all along the assessee was not charged with interest and penalty". Later on, show cause not....
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....tement; or (d) suppression of facts; or (e) contravention of any of the provisions of this act or of the rules made thereunder with intent to evade payment of duty (5) where, during the course of any audit, investigation or verification, if it is found that any duty of Excise has not been levied or paid or has been shot levied or short period or erroneously refunded for the reasons mentioned in clause (a) or (b) or (c) or (d) or (e) of sub-section (4) of section 11A the details relating to the transaction are available in the specified record, then in such cases, the central excise officer shall, within five year period from the relevant date serve a notice on the person chargeable with the duty requiring him to s....
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....f evidence to prove either suppression or misdeclaration of facts or contravention of provisions with intention to evade payment of duty. On the other hand, the appellant immediately reversed the credit as and when it was pointed out by the audit officers and the officers clearly noted that interest and penalty are not to be levied. Inspite of these notices were issued after nearly 2 years after the audit observations and reversal of credit. 6. Moreover, during the relevant period section 11A (2B) which reads as follows: "Where any duty of excise has not been levied or paid or has been short-levied or short-person paid or erroneously refunded, the person, chargeable with the duty may pay the amount of duty (on the basis of his o....