Utilisation of CENVAT Credit of Excise duty of Defaulted period without any wilful avoidance: CESTAT Quashes penalty u/s 11AC of Central Excise Act

Kalp Corporation Vs C.C.E. & S.T. (CESTAT Ahmedabad)

Introduction: The case of Kalp Corporation vs. C.C.E. & S.T. (CESTAT Ahmedabad) revolves around the issue of imposing penalties under Section 11AC of the Central Excise Act, 1944, Rule 25 and Rule 27 of the Central Excise Rules, 2002, and Rule 15(2) of the Cenvat Credit Rules, 2004. The core question addressed by the CESTAT Ahmedabad was whether penalties should be levied when the appellant had delayed the monthly payment of excise duty and subsequently used CENVAT credit for payment. This article provides a detailed analysis of the case and its implications.

Detailed Analysis:

1. Background: The case relates to an appeal by Kalp Corporation, contesting the penalty imposed on them under various provisions for delayed payment of monthly excise duty and the utilization of CENVAT credit for duty payment.

2. The Central Issue: The primary question before the CESTAT Ahmedabad was whether the appellant was liable for penalties under Section 11AC of the Central Excise Act, 1944, Rule 25 and Rule 27 of the Central Excise Rules, 2002, and Rule 15(2) of the Cenvat Credit Rules, 2004 due to their delayed payment of monthly excise duty.

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