2024 (10) TMI 1335

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.... the Cenvat Credit Rs. 1,74,56,749/- under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A (1) of the Central Excise Act, 1944. Penal provisions were also invoked against the main noticee M/S. RAJ REYON INDUSTRIES LTD. The appellant was also asked to show cause as to why penalty should not be imposed on him as per the provisions of the Rule 15 (1) of the Cenvat Credit Rules, 2004. The matter got adjudicated vide impugned Order-In-Original dated 13.11.2015 where under the demand of Service Tax was confirmed against the main party namely M/S. RAJ REYON INDUSTRIES LTD. and penalty of equal amount has also been imposed as per the Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944. The a....

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....Tribunal's decision in case of SHRI PRANATHARIHIHARAN SRIDHARAN VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, VADODARA-I reported under 2023 (3) TMI 1123 -CESTATAhmedabad dated 24 March, 2023. 5. I have heard both the sides, I feel that it will be proper of have glance at the provision of the Cenvat Credit Rules, 2004. It provides as follows: "[RULE 15. Confiscation and penalty. - (1) If any person, takes or utilises CENVAT credit in respect of input or capital goods or input services, wrongly or in contravention of any of the provisions of these rules, then, all such goods shall be liable to confiscation and such person, shall be liable to a penalty [in term of clause (a) or clause (b) of sub-section (1) of section 11AC of the Ex....

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.... Rule 15 of Cenvat Credit Rules, 2004:- "[RULE 15. Confiscation and penalty. - (1) If any person, takes or utilises CENVAT credit in respect of input or capital goods or input services, wrongly or in contravention of any of the provisions of these rules, then, all such goods shall be liable to confiscation and such person, shall be liable to a penalty [in term of clause (a) or clause (b) of sub-section (1) of section 11AC of the Excise Act or sub-section (1) of section 76 of the Finance Act (32 of 1994), as the case may be]". From the plain reading of Rule 15(1), we find that a person shall be liable to penalty who takes or utilize Cenvat credit in respect of input or capital goods or input services wrongly or in contraven....

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....t exceeding the duty on the excisable goods in respect of which any contravention has been committed, or ten thousand rupees, whichever is greater. (2) In a case, where the CENVAT credit in respect of input or capital goods has been taken or utilized wrongly on account of fraud, wilful mis- statement, collusion or suppression of facts, or contravention of any of the provisions of the Excise Act or the rules made thereunder with intention to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of section 11AC of the Excise Act. (3) If any person, takes CENVAT credit in respect of input services, wrongly or without taking reasonable steps to ensure that appropriate serv....