CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL BANGALORE REGIONAL BENCH - COURT NO. 2 Excise Appeal No. 23780 of 2014 (Arising out of Order-in-Original No. 35/2014 dated 10.09.2014 passed by the Commissioner of Central Excise, Bangalore-I)

Commissioner of Central Excise, P.B. No. 5400, C R Buildings, Bangalore, Karnataka – 560001 ........Appellant(s)

VERSUS Continental Automotive Components India Pvt Ltd.

No. 53b, Bommasandra Industrial Area, Phase-1 Hosur Road, Bangalore Karnataka – 560099 ............Respondent(s)

WITH Excise Appeal No. 23841 of 2014 (Arising out of Order-in-Original No. 35/2014 dated 10.09.2014 passed by the Commissioner of Central Excise, Bangalore- I)

Continental Automotive Components India Pvt Ltd No. 53b, Bommasandra Industrial Area, Phase-1 Hosur Road, Bangalore Karnataka – 560099 ............. Appellant(s)

VERSUS Commissioner of Central Excise, P.B. No. 5400, C R Buildings, Bangalore, Karnataka – 560001 ..............Respondent(s)

Appearance:

Mr. M.S. Nagaraja, Advocate for the Assessee Mr. Rajesh Shastry, Authorised Representative (AR) for the Revenue Coram:

Hon'ble Mr. P.A. Augustian, Member (Judicial)

Hon'ble Mr. Pullela Nageswara Rao, Member (Technical)

Final Order Nos. 22119-22120 /2025 Date of Hearing: 18.12.2024 Date of Decision: 17.06.2025 Per: P. A. Augustian These 2(two) appeals are filed against Order-in-Original No.

35/2014 dated 10.09.2014 passed by the Commissioner of Central Excise, Bangalore-I by the Revenue and the Appellant, M/s. Continental Automotive Components India Pvt., Ltd., respectively. The period involved is March 2009 to September 2013 and show cause notice was issued on 18.02.2014.

2. The issues in Appeal No. E/23841/2014 filed by the appellant are;

(i) whether the demand of Cenvat credit on partial provision of inputs is tenable as per Rule 3 (5B) of the Cenvat Credit Rules, 2004 as applicable up to 28.02.2011;

(ii) whether demand of Cenvat credit in terms of Rule 3(5B) of Cenvat Credit Rules, 2004 is sustainable in respect of finished goods / final products which were treated as scrap and cleared on payment of duty and;

(iii) whether demand of duty is sustainable on Cenvat credit availed on entire value of inputs for which only a part provision has been made in the books of accounts for the period from March 2009 to February, 2012.

3. As regards Appeal No. E/25780/2014 filed by the Revenue, the issue is whether benefit of reduced penalty can be extended to the appellant prior to 08.04.2011.

4. The brief facts are the Appellant is manufacturing excisable goods and availing Cenvat credit on payment of duty. Alleging that the appellant who had availed the provision for write-off of the obsolete / non-moving inputs and provision for scraping of inputs periodically has not paid the excise duty against the Cenvat credit availed against the said goods, Show Cause Notice was issued and Adjudication Authority confirmed the demand of duty along with interest, imposed penalty and also appropriated the amount paid by the Appellant. Aggrieved by said order, present appeals were filed before the Tribunal.

5. When the appeals came up for hearing, the Learned Counsel for the Appellant submits that the entire demand was for recovery of cenvat credit of Rs. 81,11,125/- with interest and during investigation, Appellant had paid the said amount and facts being so, issuing a show cause notice is prima facie unsustainable. The Appellant had paid entire CENVAT credit on 19.11.2013 and the show cause notice was issued on 18.02.2014 which is prima facie unsustainable. In this regard, Learned Counsel draws our attention to sub-section 2 of Section 11A of the Central Excise Act, 1994 and the same is extracted below:-

SECTION 11A. Recovery of duties not levied or not paid or short-

levied or short-paid or erroneously refunded.

(1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason, other than the reason of fraud or collusion or any wilfu