2018 (11) TMI 896 – CESTAT NEW DELHI – TMI – CENVAT Credit – capital goods – MH Sheet Metal Components (Rail) – Held that:- The demand of cenvat credit of ₹ 42,580/- on the goods used for repair of capital goods is already dropped – demand withheld.
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Penalty – CENVAT Credit on vehicle insurance premium and health insurance premium already dropped – Held that:- Law is settled that the allegations as that of suppression with a malafide mensrea of tax evasion are of grave nature and cannot be confirmed unless and until there is a cogent evidence to that respect. For imposition of penalty, it has to be proved by the Department that the assesse acted deliberately in defiance of law and was guilty of conduct concumacious or dishonest or acted in conscious disregard of its obligation – penal proceedings dropped.
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CENVAT Credit – input service – Works Contract Service – Held that:- The demand of Credit of service tax paid on Work Contract Service has already been dropped – dem
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be included in the normal value of the goods – demand withheld.
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Demand of Interest – Held that:- Though the appellant has taken the plea that the interest amount has been paid and has not been reversed. The said fact for want of any evidence on record required verification from the Adjudicating Authority below. For this limited purpose, matter is hereby remanded back.
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Appeal allowed in part and part matter on remand. – Excise Appeal No. E/50036/2018 [DB] – A/53092/2018-EX[DB] – Dated:- 7-9-2018 – MR. C.L. MAHAR, MEMBER (TECHNICAL) And MRS. RACHNA GUPTA, MEMBER (JUDICIAL) Present for the Appellant: Ms. Rinki Arora, Advocate Present for the Respondent: Ms. Tamanna Alam, DR ORDER PER: RACHNA GUPTA The appellants herein are engaged in manufacture of railway sleeper of cement concrete and are availing cenvat facility of duty / service tax paid on the inputs and input services under Cenvat Credit Rules, 2004 (CCR 2004). During an audit for the year 2013-14, the Department obser
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t of moulds and other capital goods is also excluded under excluding clause [A(b)] from the definition of input service as defined under Rule2(1) of Cenvat Rules, 2004. (iv) there was short payment of central excise duty of ₹ 9,26,377/- on price escalation bills raised for ₹ 74,94,955/- on final products manufactured and cleared by them. Resultantly, a Show Cause Notice No. 4879 dated 03.08.2015 was served upon them proposing a Central Excise duty amounting to ₹ 9,26,377/- alongwith the interest at appropriate rate on the said amount and the proportionate penalties. The said Show Cause Notice was adjudicated vide the Order-in-Original No. 12300 dated 23.12.2016 vide which the wrongly availed cenvat credit of ₹ 3,92,559/- alongwith the penalty of ₹ 1,96,280/- was confirmed. An amount of ₹ 2,70,821/- as was already paid by the appellant was directed to be appropriated against the said demand confirmed. Aggrieved of the said order, the Appeal was filed
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pugned Show Cause Notice. The question of imposition of any penalty upon the respective amount does not at all arise. It is submitted that though the interest has not been reversed but the penalty still cannot be imposed with respect to the duty of clearance of railway sleepers. It is mentioned that the additional duty was required to be paid due to price escalation clause existing in the relevant contracts. Hence, the same could not be paid unless and until railway authorities finalised the relevant price escalation. Thus, the question of imposition of penalty (for an amount of ₹ 7,68,906/-) as has been upheld by the order under challenge is liable to be set aside. Also, for the reason that the total duty of ₹ 7,93,136/- on finalisation of escalation bills for ₹ 55,22,821/- by the railway authorities alongwith the interest of ₹ 1,57,830/- is more than credit availed, the penalty is therefore neither justifiable nor sustainable and thus is liable to be set aside
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ce premium and health insurance premium has admittedly been reversed. It is also an admission that the same was reversed by the appellant on his own that too prior the impugned Show Cause Notice. It is the case of the appellant that the same was claimed under bonafide inadvertent mistake. In the given circumstances, invoking of provisions of Section 11A/Section 11AC for imposing penalty are opined not applicable. Those provisions can be invoked only when there is the suppression of facts that too with an intent to evade tax. Law is settled that the allegations as that of suppression with a malafide mensrea of tax evasion are of grave nature and cannot be confirmed unless and until there is a cogent evidence to that respect. For imposition of penalty, it has to be proved by the Department that the assesse acted deliberately in defiance of law and was guilty of conduct concumacious or dishonest or acted in conscious disregard of its obligation. The Hon ble Apex Court in the case Hindusta
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the said reason itself, the penalty even for the short payment of Central Excise duty is hereby set aside. 8. Now, coming to the issue of short payment of Central Excise duty on the price escalation bills raised for ₹ 74,94,955/-. From the 13 escalation bills, it stands clear that there is a calculation error in arriving to the said amount and in fact out of said bills, the amount of Central Excise duty of price escalation bill is ₹ 62,20,925/-. Since the duty is payable on price escalation and the appellant could not have produced any document proving that the railway authorities had finalised the amount of those 13 bills at an amount of ₹ 55,22,821/-, it is held that the order under challenge has rightly confirmed the said demand. Apparently, the appellant has failed to prove that the Bills on which amount has been calculated were merely the proposal amount. As there are no two set of bills on record, it is held that demand has rightly been confirmed under this Hea
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