The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), deleted personal penalty and ruled that malafide intention of the employee cannot be attributed to the employer.
The appellant, Sanofi India Limited, is availing the benefit of exemption Notification in respect of their product, namely, Insuman, Lantus (Notification No. 06/03 dated 01.03.2003 as amended), Campto Injection and Granocyte Injection (Notification No. 55/02 dated 07.11.2002).
The appellant is clearing the goods, namely, Vaxem HIB at nil rate of duty. The appellant started availing cenvat credit on various input services from March 2005. The case of the department is that since the appellant are availing the cenvat credit in respect of common input services, they are liable to pay 10% of the value of exempted goods or goods attracted nil rate of duty in terms of Rule 6(3) of the Cenvat Credit Rules 2004.
The Counsel appearing for the appellant, Jigar Shah, submitted that the appellant have reversed the entire credit of common input services used in the manufacture of dutiable as well as exempted goods, therefore, the demand of 10% of the value of the exempted goods in terms of Rule 6(3) will not sustain.
The Counsel further submitted that there is no suppression of the fact on the part of the appellant as entire detail of availment of cenvat credit was declared in the monthly returns regularly, therefore, there is no suppression of fact on the part of the appellant. Hence, the entire demand is time bar also.
V.G. Iyengar, the Authorized Representative appearing on behalf of the Revenue reiterated the findings of the impugned order.
The Coram consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “As regard, the personal penalty, firstly the appellant company has reversed the credit accordingly, the demand is not prima facie sustainable. Consequently, since the issue relates to the interpretation of Rule 6 of Cenvat Credit Rules, 2004, malafide intention of the present employee with the appellant cannot be attributed.”
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