Sai Industries Versus Commissioner of CGST Palghar
Central Excise
2019 (2) TMI 1481 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 20-2-2019
Appeal No. E/88036/2018 – A/85363/2019
Central Excise
Mr. S.K. Mohanty, Member (Judicial)
Ms. Rima Sunit, Representative for appellant
Shri A.S. Parabh, Asst. Commr (AR) for respondent
ORDER
Per: S.K. Mohanty
Brief facts of the case are that the appellant is engaged inter-alia, in the manufacture of paints and varnishes falling under Chapter 32 of the CETA, 1985. The appellant avails CENVAT Credit of Central Excise duty paid on inputs & capital goods and service tax on input services. During the course of EA-2000 audit, the Central Excise Officers observed that the assessee had availed ineligible CENVAT Credit on input services. On the basis of objection raised by audit wing, the appellant had reversed the amount of Rs. 1,84,517/- and vide letter dated 07.09.2016 had intimated the department that due to inadvertence
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ue to inadvertence, CENVAT Credit was wrongly taken by the appellant and on detection of such mistake by the audit wing, such irregularly availed CENVAT Credit was reversed and due intimation of such effect was filed before the department. Thus, she submits that there was no suppression of facts on the part of the appellant, in defrauding the Government revenue. In this context, she has referred to the letter dated 07.09.2016 addressed to the Jurisdictional Range Superintendent intimating the particulars of reversal of CENVAT Credit, with the request for non-initiation of any proceedings in terms of Section 11A (2) of the Act. Further, learned authorized representative of the appellant also submits that out of the total liability of Rs. 1,85,104/-, the appellant had reversed the amount of Rs. 1,84,517/- before the issuance of show-cause notice and the balance liability was discharged before passing of the adjudication order. Thus, it is prayed that the show-cause notice issued and the
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hich were made known to the department through external sources or otherwise. Since the adjudged demand was proposed for recovery based on records maintained by the appellant, the demand notice should have been issued under Section 11A(4) of the Act, without taking recourse to Section 11A of the Act. Admittedly, there is no element of suppression, mis-statement, fraud etc, on the part of the appellant in defrauding the Government revenue. Therefore, in my considered opinion, the department has wrongly invoked the provisions of Section 11A(4) of the Act, for issuance of show-cause notice and confirmation of the adjudged demand.
6. In view of above, I do not find any merits in the impugned order, so far as it uphold the adjudged penalty confirmed in the adjudication order. Accordingly, after setting aside the same, I allow the appeal in favour of the appellant with regard to imposition of penalty only.
7. The appeal is disposed of in the above terms.
(Order dictated in Court)
Case
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