2019 (1) TMI 701 – CESTAT ALLAHABAD – TMI – Penalty – CENVAT Credit on removal of capital goods after use – Rule 3 (5A) of Cenvat Credit Rules – appellant’s contention that they were not aware of the legal position that they have to pay the duty at the time of clearance of the Cenvatable Capital Goods – duty paid with interest paid on being pointed out – Held that:- There is no dispute on the facts that admittedly the clearances of the transformer was by raising an invoice in which case, it cannot be said that there was any mala fide on the part of the assessee to suppress the fact of clearance of the transformer. Non-payment duty by itself cannot lead to ipso facto presence of any mala fide – Tribunal in the case of Commissioner of Centra
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As per the audit conducted in their factory it was found that the appellant had procured a Transformer and availed Cenvat Credit of 50% of the total duty paid on the same in January, 2011 and the balance was availed in the next year. The said transformer was subsequently cleared by the appellant vide Invoice No.2200 dated 05.09.2014 without paying the duty of ₹ 2,67,820/- on the transaction value in terms of Rule 3 (5A) of Cenvat Credit Rules. On being pointed out, they paid duty of ₹ 3,12,000/- and also deposited interest of ₹ 91,588/-. 2. On the above basis they were issued a show cause notice dated 18.10.2016 which was adjudicated by the Original Adjudicating Authority confirming the demand to the extent of ₹ 2,6
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ty is being challenged before Tribunal. 4. It is appellant s contention that they were not aware of the legal position that they have to pay the duty at the time of clearance of the Cenvatable Capital Goods. The transaction of sale of the transformer was made on the basis of the invoices, which was part of their records and as such it cannot be said that there was any mala fide on their part to evade any duty. As soon as the said fact was pointed out to them by the audit, they deposited the duty along with interest even before the issuance of the show cause notice. The payment of interest is penal in nature and as such no further penalty is required to be imposed upon them. Reliance stands placed upon various decisions of the Tribunal. 5. I
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