AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 131
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....-15. On scrutiny of the fixed asset schedule attached to the financial statements and plant and machinery ledger account furnished for the year 2013-14, it was found that no capital goods were added to the fixed assets pertaining to the plant and machinery and the capital goods on which the CENVAT credit was availed during every month of the year 2013-14 had been cleared to M/s.Beach Minerals company at the end of the same month by making a credit entry in the plant and machinery account every month in the name of M/s.Beach Minerals Company. In view of the above, a show cause notice dated 08.12.2017 came to be issued by the Joint Commissioner calling upon the appellant to show cause as to why demand of excise duty, interest and penalty should not be imposed under Section 11A of the Central Excise Act 1944 (hereinafter referred to as 'the Act') read with Rule 14(1) (II) of CENVAT Credit Rules 2004 (for brevity hereinafter referred to CCR) and Section 11AA of the Act read with Rule 14(1)(II) of CCR and Section 11(AC) of the Act read with Rule 15(2) of the CCR. 3. Adjudication proceedings were initiated by the office of the Joint Commissioner and after affording an opportun....
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....see had paid the duty well before the show cause notice was issued and paid the interest after it was assessed by the Assessing Authority and consequently, no penalty can be imposed against the assessee?" 2.Heard. 3.Judgment reserved." 8. This Court heard the learned counsel on either side and carefully went through the order passed by the CESTAT, which confirmed the order passed by the appellate authority, who, in turn, confirmed the order passed by the assessing authority. 9. The main ground that was urged by the learned counsel for the appellant is that the show cause notice that was issued by the assessing authority did not even specify under which limb of Section 11(AC) of the Act, the penalty was sought to be imposed. Therefore, in the light of the payment of the duty and interest, at the best, this case can be brought only within the scope of Section 11(AC) (1)(a) and the proviso to the said sub section will apply and consequently no penalty shall be payable by the appellant. It is further submitted that even the CESTAT while passing the order had taken note of the fact that the case falls within the scope of Section 11AC (1)(a) and therefore, confirm....
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....pect of such capital goods and such removal shall be made under the cover of invoice prescribed under the Central Excise Rules. Explanation 1 and Explanation II to Rule 3(5) of CCR prescribes further procedure to be followed. If the manufacturer of goods fails to pay the amount payable under Rule 3(5) of CCR, it is liable to be recovered in the manner as provided in Rule 14 of CCR for recovery of CENVAT credit wrongly taken and utilised. 15. Rule 14(1) (II) of CCR provides that for CENVAT credit wrongly taken and utilised, it shall be recovered along with interest from the manufacturer and the provisions of Section 11A and 11AA of the Act shall apply. Apart from that where there is a wilful suppression of facts regarding clearance of capital goods for which CENVAT credit has been availed with the intent to evade the payment of excise duty, the assessee is liable to pay penalty under Rule 15(2) of CCR read with Section 11AC of the Act. 16. It is also not in dispute that the appellant assessee on being pointed out about the above violation, paid Rs. 67,79,610/- by debiting the CENVAT credit account during the month of April 2017. Thus, the duty component was paid much before th....
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....hin the period so specified. (c) where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of fraud or collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (10) of section 11A shall also be liable to pay a penalty equal to the duty so determined: "Provided that in respect of the cases where the details relating to such transactions are recorded in the specified record for the period beginning with the 8th April, 2011 up to the date on which the Finance Bill, 2015 receives the assent of the President (both days inclusive), the penalty shall be fifty per cent. of the duty so determined: (d) where any duty demanded in a show cause notice and the interest payable thereon under section 11AA. issued in respect of transactions referred to in clause (c), is paid within thirty days of the communication of show cause notice, the amount of penalty liable to be paid by such person shall be fifteen pe....
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....ant had availed CENVAT credit on the excise duty paid on capital goods in two trenches during the years 2013-14 and 2014-15. But, however, had not followed the relevant rule while removing the capital goods and clearing it in the name of M/s.Beach Minerals Company. In the show cause notice, there is a clear reference to Rule 15(2) of CCR r/w Section 11AC and it only indicates that penalty was sought to be imposed on the ground of suppression of facts. Consequently the facts of the present case will not fall under Section 11AC(1)(a) and it will only fall under Section 11AC(1)(c) of the Act. 23. The very fact that the appellant on being informed about the violation, proceeded to pay the duty component during April 2017 shows that the appellant had also tacitly admitted suppression of facts. 24. The proviso to sub section (1)(a) of Section 11AC will come into play only in a case where the duty and interest payable under Section 11AA is paid either before the issue of show cause notice or within 30 days of the issue of show cause notice. In such a scenario, no penalty shall be payable by the person liable to pay the duty. Admittedly, in this case, only the duty component was paid....