Order date – 12 December 2022

Facts –

• The Appellant, M/s. Surin Automotive Ltd., are engaged in manufacture of automobile parts and are also availing CENVAT credit of duty paid on inputs, capital goods and input services.
• It was found during the audit that credit note was issued by the supplier, the appellant failed to reverse the respective credit availed. The appellant had thus availed excess credit which was not eligible.
• Show Cause Notice was issued proposing to deny the credit for the period from April 2012 to March 2014 along with interest and penalties. Order in Original passed by the adjudicating authority confirming the duty and interest along with penalty, the appellant had paid the duty and the interest along with 25% of the penalty within 30 days from receipt of the Order in Original but the appellant was not given an option to pay 25% of the penalty amount.

Issue –

• Whether the appellant is eligible for an option to pay 25% of the penalty amount?

Order –

• The Tribunal finds that as per Section 11 AC where such duty as determined under sub-section (2) of Section 11A, and the interest payable thereon under Section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent of the duty so determined.” 
• The Tribunal relied on the decision of the High Court in the case of AP Steels Vs. CCE, Trichy – 2017 (355) ELT 6 (Mad.) held that the appellant has to be given an option to pay 25% penalty if they are paying duty along with interest within 30 days of receipt of the order.
• Hence it was held that the payment of 25% of the penalty amount paid by the appellant would suffice. The impugned order confirming the equal penalty is set aside without disturbing the confirmation of duty and interest.
• Hence the appeal is allowed partly.