The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the excise duty demand imposed on the manufacture and clearance of textile machinery on the grounds of wrongful availment of CENVAT Credit.
Ambica Engineering Works, the appellant assessee engaged in the manufacture of textile machinery falling under Chapter 84 of the Central Excise Act, 1984 and they are availing CENVAT credit under CENVAT Credit Rules, 2004, and utilizing the same for payment of central excise duty on the goods cleared by them.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand and for the imposition of penalty under rule 25 of the Central Excise Rules.
S Suriyanarayanan, the counsel for the assessee contended that the subsequent show cause notice which was in the present case was issued which was for a normal period, therefore, neither Rule 25 of the Central Excise Rules,2002 nor Section 11AC of the Central Excise Act can be invoked as there was no suppression of fact.
P. Ganesan, the counsel for the department relied on the decisions made by the lower authorities and contended that the demand raised by the revenue was as per the law and liable to be sustained.
The Bench observed that the penalty imposed under rule 25 of the Central Excise Rules was not sustainable and the demand which was raised for the normal period was sustainable and the assessee’s machinery namely relaxed drum was not covered under the Notification, therefore, the assessee had wrongly availed the Exemption Notification.
The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) upheld the excise duty demand against the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
