Commissioner of Central Excise vs Sangrur Agro Ltd.

Ashutosh Mohunta, J.—The Revenue has filed this appeal impuging the orders (Annexures P-3 and P-4) passed by the Commissioner (Appeals) and by Customs, Excise and Service Tax Appellate Tribunal (for short ''the Tribunal'') whereby penalty u/s 11AC of the Central Excise Act has been set aside on the ground that provisions of Section 11A are applicable to recovery of duty of excise whereas, the dispute in the present case is whether Cenvat credit has been claimed over and above the limit prescribed?

The respondent is a manufacturer of Vanaspati Ghee. It claimed Cenvat credit on certain inputs more than the prescribed limit. As the respondent had claimed credit more than its entitlement hence, the respondent was required to reverse the same in terms of Rule 12 of the Cenvat Credit Rules, 2002. The respondent duly reversed the excess credit availed by it.

The short question is whether the respondent is liable to pay penalty and interest on the excess amount claimed by it? The Commissioner (Appeals) as well as the Tribunal have held that provisions of Section 11AC of the Central Excise Act are inapplicable as they relate only to short payment of duty, whereas the present case relates to reversal of the excess amount claimed by the respondent in terms of Rule 6(3)(b) of the Cenvat Credit Rules. Apart from the above, a perusal of the language of Section 11AC of the Central Excise Act shows that the same would be applicable only if in case where there is an attempt to evade duty. The present case relates to reversal of amount under Rule 6(3)(b) of the Cenvat Credit Rules. We are of the considered opinion that Section 11AC of the Central Excise Act is not applicable in the present case. The findings of the Appellate Tribunal are upheld.

In view of the above, we find no merit in the appeal and the same is dismissed.