2018 (11) TMI 1379 – CESTAT KOLKATA – TMI – Demand of interest and penalty – the appellant had reversed the amount of cenvat credit of ₹ 1,02,678/- before issuance of the show cause notice – Held that:- Since sufficient balance was always lying in their cenvat account since the date of credit taken till the reversal of the same, the payment of interest is waived.
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Penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 – Held that:- The Hon’ble High Court at Allahabad in the case of Commr. Of Cus. & C.Ex., Noida vs. Supreme Industries Ltd. [2016 (11) TMI 1289 – ALLAHABAD HIGH COURT] has held that neither any penalty nor interest under Section 11AC and under Section 11AB respectively was payable by assessee when it has deposited disputed duty voluntarily before issuing of notice under Sections 11AC and 11AB.
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The imposition of penalty under 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Cent
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, the appellant paid the excise duty amounting to ₹ 1,02,678/- by debiting from RG 23A Part II under intimation to the department on 28.04.2015. Show cause notice dated 28.07.2015 was issued to demand and recover an amount of ₹ 1,02,678/- alongwith interest and to impose penalty. The adjudicating authority passed the following order: Order In view of the findings in foregoing, I hereby pass the following order:- 1. I confirm the demand of an amount ₹ 1,02,678/- (Rupees one lakh two thousand six hundred and seventy eight) only in terms of Rule 14 of Cenvat Credit Rules 2004 read with Section 11A(10) of the Central Excise Act, 1944. 2. As sufficient balance was always lying in their account since the date of credit taken till the date of reversal of the same, I waive the payment of interest. 3. I impose penalty of ₹ 1,02,678/-(Rupees one lakh two thousand six hundred and seventy eight) only on the assessee under Rule 15(2) of the Cenvat Credit Rules, 2004 read wit
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cenvat credit was reversed before issuance of the show cause notice and hence there was no occasion for issuance of show cause notice. Ld. CA made the Bench go through the adjudication order where the ld. Adjudicating Authority has observed that the assessee reversed the amount of cenvat credit vide RG 23A Part II Sl.No.416 dated 28.04.2015 i.e. much before the issuance of the show cause notice. Further, he has also observed that as sufficient balance was always lying in their account since the date of credit taken, till the date of reversal of the same, repayment of interest was waived. Ld. CA further argued that they are not disputing the demand as reversed by them and they are before this Tribunal to contest the payment of interest and imposition of penalty. He relied upon the decision of the Hon ble High Court at Allahabad in the case of Commr. Of Cus. & C.Ex., Noida vs. Supreme Industries Ltd. [2016(341) ELT 607 (All.)]. 4. Ld. DR reiterates the discussions and findings of the
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on of law :- (i) Whether the penalty under Section 11AC is liable to be imposed on assessee and interest under Section 11AB can be levied in view of Explanation-1 of the said sub-section (2B) of Section 11A, where duty has been deposited before issue of show cause notice? 3. It is not disputed that assessee admitted liability of payment of duty and deposited requisite amount on 7-2-2003 while show cause notice was issued on 4-4-2003 proposing to impose penalty under Section 11AC and under Section 11AB of Central Excise Act but this has been set aside by Customs, Excise and Service Tax Appellate Tribunal holding that the petitioner did not intend to defy duty demanded by Tribunal hence penalty is not justified. 4. We find that there is a consensus in various High Courts as also various Benches of High Courts that if disputed duty is paid by an assessee before a show cause notice proposing penalty under Section 11AC and interest under Section 11AB is issued, this would show that there wa
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tion and also neither could place any other authority taking a different view so as to persuade us to take a different view nor could advance any other argument justifying penalty and interest under aforesaid provision even when the assessee admitting disputed liability, has deposited the same even before issuing of a show cause notice under the aforesaid provision. 6. In view of above, aforesaid substantial question of law is answered against Revenue and in favour of assessee. We uphold the view taken by Tribunal that neither any penalty nor interest under Section 11AC and under Section 11AB respectively was payable by assessee when it has deposited disputed duty voluntarily before issuing of notice under Sections 11AC and 11AB. 8. By respectfully following the decision of the Hon ble High Court cited above, the imposition of penalty under 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 is set aside. Regarding payment of interest, the Orde
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