1. A common issue is involved in these appeals and therefore both are taken up together for disposal.
2. Revenue filed these appeals against the impugned orders passed by the Commissioner (Appeals) whereby the penalty imposed under Rule 15(4) of CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 and Section 78 of the Finance Act, 1994 were set aside.
3. Heard both sides and perused the records
4. The relevant facts of the case, in brief, are that the assessee availed CENVAT credit of service tax paid on the freight incurred in the inward receipt of coal in the assessees factory used in the generation of electricity and further partly used in the excisable goods and fed into the grid of Tamilnadu Electricity Board (TNEB). The assessee had not reversed the credit used in the generation electricity to fed in the grid of TNEB. The assessees reversed the CENVAT credit used in the generation of electricity to TNEB only before the issue of the show-cause notice. Show cause notices were issued proposing demand of duty along with interest and penalty and also to appropriate the amount already deposited by them. The assessees contested the demand of duty on various grounds including the extended period of limitation. The adjudicating authority confirmed the demand along with interest and imposed penalty equal to the amount of credit under Rule 15(4) of the CENVAT Credit Rules, 2004 r/w Section 11AC of Central Excise Act and r/w Section 78 of the Finance Act, 1994. Commissioner (Appeals) while upholding the adjudication order set aside the imposition of penalty. Hence, Revenue filed this appeal.
5. On perusal of the impugned order, I find that the Commissioner (Appeals) merely proceeded on the basis of the decision of the Honble Supreme Court in the case of Maruti Suzuki Ltd. Vs. CCE 2009 (240) ELT 641 (SC) set aside the penalty imposed under Section 11AC of the Act, 1944. The Honble Supreme Court in the case of Union of India Vs. Rajasthan Spinning and Weaving Mills 2009 (238) ELT 3 (SC) held that penalty under Section 11AC of the Central Excise Act, 1944 is a punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section. In my considered view, the Commissioner (Appeals) should examine whether the ingredients as mentioned in Section 11AC would apply in the present case. It is not proper to set aside the penalty under Section 11AC only by citing the decision of the Honble Supreme Court in the case of Maruti Suzuki Ltd. (supra) without examining the material fact. Hence the impugned order of the Commissioner (Appeals) to set aside the penalty is not sustainable. It is appropriate that the Commissioner (Appeals) should pass a proper order, after examining the facts of the case and the ingredients of Section 11AC.
6. In view of the above discussion, both the matters are remanded back to the Commissioner (Appeals) to decide afresh insofar as setting aside of imposition of penalty. It is made clear that the Commissioner (Appeals) would examine the grounds of appeal filed by the Revenue and the contentions of the assessees during the remand proceedings. Needless to say that Commissioner (Appeals) shall give proper opportunity of hearing before decision. Both the appeals are allowed by way of remand.