Judgment:
Duty demand of Rs.1,23,729/- was confirmed against the assessees as they had availed the benefit of CENVAT credit on certain inputs and cleared them as defectives, without payment of duty either by reversal in CENVAT account or by debit in PLA resulting in contravention of the provisions of Rule 3(5) of the CENVAT Credit Rules, 2002. The extended period of limitation was applied against the assessees on the ground of suppression. The demand was confirmed together with interest and penalty of Rs.1,23,729/- was imposed under the provisions of Section 11AC of the Central Excise Act, 1944. The assessees paid the duty demand. Before the Commissioner (Appeals), the plea raised by the assessees was that they were not guilty of any suppression and, therefore, penalty was not warranted against them. The Commissioner (Appeals), however, upheld the adjudication order entirely; hence this appeal.
2. I have heard both sides. The finding that the assessees were guilty of suppression of facts with intention to evade payment of duty is based not only on the fact that the assessees had raised necessary invoices showing details such as value, amount of duty payable on the clearances of defective inputs etc., which showed that they clearly aware of the fact that they were required to discharge duty liability on such clearances and yet did not pay duty while clearing the defective inputs, but also upon the admission of Shri M.K. Yousuf, Chairman and Managing Director of the assessees company. The charge of suppression stands clearly established against the assessees. They have, therefore, been rightly held to be liable to penalty. I accordingly uphold the impugned order and reject the appeal.