Penalty not leviable if incorrect claim admitted by assessee on pointing out the same by the audit and the mistake was bonafide

 Brief Facts of the case:

Appellant(Assessee) imported three machines and cleared EPCG license at concessional rate of 5% where CVD is exempted and the appellant availed credit of Rs.48,52,516/- as per the assessment of the Bill of Entry. Adjudicating authority in his order confirmed the demand and also appropriated the interest amount and imposed equivalent penalty under Section 11AC treating the case to be of suppression of the facts with intent to avoid the payment of duty. On appeal to CCE(A) , the penalty was upheld , therefore, the assessee preferred an appeal before the CESTAT Chennai.

 Contention of the Assessee:

The learned counsel for the assessee submitted that the all the import and export clearances and payment of duties were handled at their Head office located at Tiruppur. The capital goods were received in their unit at Tarapuram. He further submitted that in the Bill of Entries cleared under the EPCG license, it is clearly indicated the assessment details, Basic Customs Duty, CVD amount.

Mr. K. Palanisamy in charge of administration at the factory had inadvertently took the credit of CVD on three Bills of Entry on the belief that CVD has been paid as per details given in the B/E which is a genuine mistake (which was infact not payable as the clearance was under EPCG license thus exemption was availed). Due to communication gap between the head office and the factory the lapse happened.

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