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2023-VIL-971-CESTAT-BLR-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Irregular availment of Cenvat Credit - Appellant manufactures foam and foam products and rubberised coir products - Whether the appellant is eligible for the benefit of Notification No. 1/2011-CE dated 1.3.2011 when credit is availed is reversed along with interest on inputs and input services used in the manufacture of the final products on which the concessional rate of duty was availed – appellant defense that availment of Cenvat Credit was an inadvertent human error but since credit was reversed immediately along with interest when pointed out, they cannot be penalised with denial of benefit of the Notification - HELD - the exemption Notification needs to be interpreted strictly and unless the conditions of the Notification are fulfilled, the benefit of the Notification cannot be extended - the appellant was knowing very well that they are not eligible for availing CENVAT credit for the goods that are cleared on concessional rate of duty but still they have availed CENVAT credit for almost three years - the company was aware of the fact that such availment of CENVAT credit was illegal. The irregular availment of credit came to the notice of the department only after the officers of internal audit party visited their unit and verified the records - the appellant had consciously taken CENVAT credit which was irregular. Hence, having suppressed the facts, the Commissioner was right in invoking the proviso to Section 11A of CEA, 1944 – The error committed by the ground level officers cannot be alleged to be done with the knowledge of the senior officers. Therefore, the Chairman and Managing Director of the company, the Vice President and Head of Finance cannot be penalized – Appeal in respect of the company is disposed of by way of remand only for redetermination of penalty under Rule 25 read with Section 11AC of the CEA, 1944 – Appeal is disposed of
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