2018 (6) TMI 115 – CESTAT MUMBAI – TMI – Penalty u/r 15(2) read with Section 11AC of the CEA 1944 – reversal of CENVAT Credit of various input services which were considered as ineligible to be availed – whether the first appellate authority was correct in setting aside the penalty imposed by the adjudicating authority on the respondent herein? – Held that:- It is undisputed that the respondent-assessee has paid all the demand with interest before the issuance of SCN on being pointed out by Revenue authorities. It is also undisputed that the records of the respondent-assessee’s were audited by the audit party regularly during the period in question – if the respondent-assessee discharged the demands as pointed out by the authorities during verification of the records with interest, provisions of section 11A(2B) would get attracted and SCN should not have been issued to respondent-assessee.
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The first appellate authority was correct in setting aside the penalty imposed and the im
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During the course of proceeding, the respondent herein reversed the entire CENVAT Credit on such services along with interest. Adjudicating authority in the adjudication confirmed the demand raised with interest, appropriated the amount and also imposed penalties by invoking provision of Rule 15(2) read with Section 11AC of the Central Excise Act, 1944, as applicable during the relevant period. On an appeal filed by the respondent, the first appellate authority upheld the confirmation of demand along with interest and set aside the penalties imposed. For setting aside the penalties, the first appellate authority has recorded that there is intention to evade duty, as the records of the respondent were audited by the audit party during the relevant period in question i.e. March, 2012 to December, 2012. 5. Learned D.R. would draw my attention to the facts of the case. He would submit that the demands have been raised on the assessee-respondent by invoking extended period which would mean
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s were audited by the audit party regularly during the period in question. 6.1 In my considered view, if the respondent-assessee discharged the demands as pointed out by the authorities during verification of the records with interest, provisions of section 11A(2B) would get attracted and show-cause notice should not have been issued to respondent-assessee. This provision of law was not considered by the adjudicating authority while imposing equal amount of penalty but first appellate authority correctly appreciated the law and set aside the penalty. 6.2 As regards the point raised by learned D.R., I find that the first appellate authority was correct in coming to a conclusion that the records of the respondent-assessee being audited by the authority during the period in question, there cannot be any allegation of suppression of the fact with intention to evade, evenon the discharge of duty liability along with interest. If respondent-assessee would have contested the demand on limita
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