CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL MUMBAI REGIONAL BENCH, COURT NO. 5 (Arising out of Order-in-Appeal No. PUN-CT-APP-II-000072-2020-21 dated

29.01.2021 passed by the Commissioner (Appeals-II) Pune.)

M/S. BHIMA SAHAKARI SAKHAR KARKHANA LTD Appellant MADHUKAR NAGAR, PATAS, TAL-DAUND, DIST. PUNE-412219 Vs.

THE COMMISSINER CGST -PUNE-I

41-A, ICE HOUSE, OPP. Respondent WADIA COLLEGE, SASSOON ROAD, PUNE-411001. Appearance:

Shri Abhiram S. Apte, Advocate present for the Appellant.

Shri Rajiv Ranjan, Assistant Commissioner, Authorised Representative for the Respondent.

CORAM:

HON'BLE Dr. SUVENDU KUMAR PATI, MEMBER ( JUDICIAL )

FINAL ORDER NO. A/85036/2026 Date of Hearing : 09.12.2025 Date of Decision: 22.01.2026 Denial of Cenvat Credit of Rs. 3,38,796/- and order for its recovery under Rule 14(1)(ii) of the Cenvat Credit Rules 2004 (CCR) alongwith appropriate interest and equal penalty imposed under Rule-14 and Rule-15 (2) of the Cenvat Credit Rules, that received affirmative confirmation from the Commissioner (Appeals), vide his above referred order is assailed by the assessee appellant before this forum.

2. Fact of the case, in a nut shell, is that appellant is a manufacturer of sugar molasses and its by-products and it had availed Cenvat Credit of the Central Excise duty paid on the inputs and capital goods. It was pointed out during EA 2000 Audit of the record of appellant that from April 2013- June 2017, there were certain wrong availments of Cenvat Credit on inputs and of Capital Goods that was calculated to be Rs. 3,38,796/- but Appellant had already reversed Rs. 2,87,502/- keeping balance amount in respect of one amounting to Rs. 51,294/- alongwith interest and equal penalty. However, it was issued with a show-cause notice for recovery of alleged inadmissible credit to the tune of Rs. 3,38,796/- alongwith with interest and equal penalty which, it contested unsuccessfully before the Adjudicating Authority and Commissioner (Appeals) and ultimately approached this forum for necessary relief.

3. During the course of hearing of appeal Ld. Counsel for the Appellant Mr. Abhiram S. Apte, Advocate submitted that appellant had already reversed Rs. 2,87,502/- out of total demand amounting to Rs. 3,38,796/-. It was inappropriate on the part of Department to issue show-cause notice for recovery of the entire amount in violation of statutory provision contained in Section 11A(2) of the Central Excise Act, apart from the fact that for that differential amount of Rs. 51,294/-, the invoice (Page-47 of the Appeal Memo) would go to show that for design, supply, installation, commissioning with satisfactory trial of the feeder bay, the amount was charged out of which only for erection part, no credit is available against duty paid on the inputs but on the entire amount of Rs. 4,15,000/-, reversal of duty paid for an amount of Rs. 51,294/- was sought for, even when Appellant had demonstrately established from its work order that it was a composite contract of erection, commissioning etc., a part of which is only work contract. Further, in submitting decision of this Tribunal passed in the case of Mundra Port & Special Economic Zone Ltd. Vs. CCE, Rajkot, reported in 2009(13) S.T.R. 178 (Tri.-Ahmedabad) & Sarita Hand Exports Pvt. Ltd., reported in (2023) 11 Centax 258 (Tri.-Chan), he further argued that when credit availed is mentioned in the Statutory record, no mala-fied can be attributed to invoke penal provision as it is a settled decision of this Tribunal that issue involving interpretation of the provision cannot be equated with intend to evade payment of duty, for which confirmation of penalty by invoking the extended period is not at all proper and therefore, the order passed by the Commissioner (Appeals) is assailed in this case.

4. Per contra, Authorised Representative for the Respondent Department Mr. Rajiv Ranjan, Assistant Commissioner argued in support of the reasoning and rationality of the order passed by the Commissioner (Appeal