COMMISSIONER OF CENTRAL EXCISE Vs. VIDEOCON INDUSTRIES LTD.

JUDGEMENT

(1.) THE respondents are manufacturers of refrigerators chargeable to Central Excise duty They avail Cenvat credit of duty paid on inputs used in or in relation to manufacture of their finished products During the period from 20 -4 -06 to 29 -7 -2006 to 20 -4 -2007 they availed Cenvat credit amounting to Rs. 2,15,737/ - on the basis of certain invoices twice, which on being pointed out by the audit was reversed Subsequently show cause notice issued to them for confirmation of Cenvat credit demand and also for demand of interest on wrongly taken credit and imposition of penalty. The Assistant Commissioner vide order -in -original No. 51/2008 dated 7 -10 -2008, beside confirming Cenvat credit demand of Rs. 2,15,737/ - also demanded interest on the same under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AB of Central Excise Act and imposed penalty on them under Rule 15 of Cenvat Credit Rules On appeal being filed before the Commissioner (Appeals) by the respondent, the Commissioner (Appeals) by the impugned Order -in -Appeal No. 288 (DK) CE/JPR -I/2009 dated 14 -10 -2009, while upholding the Cenvat credit demand, set aside the interest and penalty Against this portion of the order, the Commissioner (Appeals), the present appeal has been filed by the Revenue. Though a notice for hearing had been sent to the respondent well in time, today when this matter was called, none representing the respondent appeared. There is also no letter from them seeking adjournment. On earlier occasion also, when this matter had been listed for hearing on 25 -5 -11, nobody representing the respondent had appeared. In view of this, under Rule 21 of the CESTAT (Procedure) Rules, 1982, this matter, so far as the respondent is concerned, is decided ex parte.

(2.) I have carefully considered the submissions of the learned DR and perused the records

(3.) AS regards the imposition of penalty, for imposition of penalty for wrong availment under Rule 15(1) of Cenvat Credit Rules, no mens rea is required to be proved and penalty is attracted whenever Cenvat credit is availed wrongly. It is only for imposition of penalty equal to the wrongly availed Cenvat credit under the provisions of sub -rule (2) of Rule 15 read with Section 11AC of the Central Excise Act, 1944, that the mens rea is required to be proved. In view of this, the impugned order setting aside the penalty on the respondent is not correct and is liable to be set aside However, looking to the circumstances of this case, the imposition of penalty equal to the Cenvat credit demand would not be justified and the same has to be reduced. In view of the above discussion, the Commissioner (Appeals)'s order setting aside the interest and penalty is set aside and in this regard, the order passed by the original Adjudicating Authority is restored However, looking to the circumstances of this case, penalty under Rule 15(1) of Cenvat Credit Rules, 2004 is reduced to Rs. 20,000/ Revenue's appeal stands disposed of, as above.