Case Law Details
Nava Bharat Ventures Limited Vs The Commissioner of Central Excise Customs & Service Tax (CESTAT Hyderabad)
Rule 15 (Confiscation and penalty) of CENVAT Credit Rules, 2004 provides for imposition of penalty if CENVAT credit has been wrongly availed which allegation must be made in the show cause notice with a proposal to recover such wrongly availed CENVAT credit under Rule 14 but such a demand has not been made. Instead, a demand of an amount equal to 8%/ 10% of the exempted goods under Rule 6(3) has been made in the show cause notice, which is only an option to the assessee and cannot be demanded under Rule 14. Since the show cause notice itself has been issued without authority of law, any penalty imposed in the impugned order in pursuance of it needs to be set aside too.
FULL TEXT OF THE CESTAT HYDERABAD ORDER
These two appeals have been filed by the assessee and the Department assailing the same order-in-original dated 31.01.20131 passed by the Commissioner of Customs and Central Excise, Hyderabad – III deciding four show cause notices dated 15.05.2008, 02.02.2009, 05.02.2010 and 25.01.2011 for successive periods, all dealing with the same issue. The total demand in these show cause notices is Rs. 100,10,55,027/-, of which the Commissioner has confirmed an amount of Rs.5,52,03,415/- in the impugned order and imposed an equal amount as penalty. The assessee has already paid an amount of Rs.3,60,03,450 on the basis of its own calculations and is disputing the rest on the ground that Rule 6(5) of the Cenvat Credit Rules, 20042 entitles it to such credit. The assessee is also aggrieved by the penalty imposed in the impugned order. Revenue is in appeal against part of the demand that has been dropped by the Commissioner and wants the entire demand as per the show cause notice to be confirmed.
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