[2015] 61 taxmann.com 244 (Mumbai – CESTAT)- CESTAT, MUMBAI BENCH Racold Thermo Ltd. vs. CCE, Pune-I

Facts:
In the course of Audit by
Central Excise Audit Team, it was observed that appellant was directed
to reverse the CENVAT credit pertaining to the value of certain written
off inputs for F.Y. 2009-10. The appellant paid the same along with
interest. Subsequently, during CERA Audit, similar written off inputs
were observed also during F.Y. 2007-08 and F.Y. 2008-09. The appellant
on their own calculated the credit and paid the same along with
interest. However show-cause notice was issued alleging penalty on the
said amount and demand was confirmed. The Revenue contended that at the
first occasion when audit was conducted and this discrepancy was raised,
the appellant should have reversed CENVAT credit for the period 2007-08
and 2008-09 also as they are aware about written off value of inputs
during the said period also. Therefore appellant although having
knowledge about written off value in their books of account, neither
reversed it nor intimated to the department; therefore the case was one
of suppression of facts. The Appellant contended that in the course of
first audit the same issue was discussed and it was held that no
reversal was required in respect of the said year and that the fact that
inputs were written of was evident from financial records and hence
there was no suppression.

Held:
The Tribunal held
that once the appellant paid the amount along with interest as per their
calculation immediately after the same was pointed out by CERA audit
team without any contest and intimated it to the department; the matter
is covered by sub-section (2B) of section 11A(1) according to which no
show cause notice is required to be issued. Therefore, penalty to that
extent was deleted. However as regards some differential amount
mentioned in the show cause notice which was not paid by the appellant,
demand of service tax, interest and penalty were confirmed.