[2014] 41 taxmann.com 260 (Bangalore -CESTAT) Inbox Air Products ltd. vs. CCE, Hyderabad
Facts:
The appellant had one manufacturing unit (Unit-i) and one service providing unit (Unit-II). Unit-I took the CENVAT credit on certain input services though it was not eligible to do so. This credit was, in fact, meant for Unit-II. The irregular availment of CENVAT credit by Unit-I was noticed by the department,
whereupon the credit was reversed. For this, a Show Cause Notice was issued and the Appellant paid interest. In the Show Cause Notice, a penalty of Rs. 2,000/- was imposed under Rule 15(3) of the CCR, which was also paid by theAppellant.
Subsequently, order was reviewed by the department for non-imposition of penalty under sub-rule (4) of Rule 15 of the CCR, 2004 read with section 78 of the Finance Act, 1994 and accordingly an appeal was filed with the Commissioner (Appeals) who allowed the same and imposed penalty under 15(4) of CCR.
This higher penalty was challenged by the Appellant contending that, no ground for imposing penalty under Rule 15(4) was alleged in the Show Cause Notice.
Held:
It was held that Para 5 of the Show Cause Notice contained an allegation to the effect that the appellant contravened certain rules with intention to evade payment of duty, but such allegation was made for the specific purpose of invoking the extended period and not for imposing a penalty under Rule 15(4). It further observed that irregular availment of the CENVAT credit as alleged for invoking Rule 15(3)and not for invoking Rule 15(4) and that though the Show Cause Notices invoked Rule 15 of the CENVAT credit Rules, 2004, any sub-rule was not specified therein. The Tribunal held that, since the different sub-rules of Rule 15 covered different factual situations and, it was incumbent on the department to specify the particular sub-rule which they wanted to invoke in a particular Show Cause Notice. Relyingupon Arnrit Foods vs. CCE2005 (190) ELT 433 (SC), the penalty under Rule 15(4) was set aside
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