3[15. Confiscation and penalty.-

(1) If any person, takes or utilises CENVAT credit in respect of input or capital goods or input services, wrongly or in contravention of any of the provisions of these rules, then, all such goods shall be liable to confiscation and such person, shall be liable to a penalty 4[in terms of clause (a) or clause (b) of sub­section (1) of section 11AC of the Excise or sub-section (1) of section 76 of the Finance Act (32 of 1994), as the case may be.]

(2) In a case, where the CENVAT credit in respect of input or capital goods or input services has been taken or utilised wrongly by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Excise Act, or of the rules made thereunder with intent to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of 5[clause (c), clause (d) or clause (e) of sub-section (1) of section 11AC of the Excise Act.]

(3) In a case, where the CENVAT credit in respect of input or capital goods or input services has been taken or utilised wrongly by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of these rules or of the Finance Act or of the rules made thereunder with intent to evade payment of service tax, then, the provider of output service shall also be liable to pay 6[penalty in terms of the provisions of sub-section (1) of section 78] of the Finance Act.

(4) Any order under sub-rule (1), sub-rule (2) or sub-rule (3) shall be issued by the Central Excise Officer following the principles of natural justice.]

 

 

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Notes:

1 For the words , without taking reasonable steps to ensure that appropriate duty on the said input or capital goods has been paid as indicated in the document accompanying the input or capital goods specified in rule 9 or contravenes, the words, in contravention of has been substituted; vide Notification No. 10/2007 CE (NT) dated 1/3/2007

2. For  the  words, ten  thousand  rupees,  the  words, two  thousand  rupees has been substituted; vide Notification No. 10/2007 CE (NT) dated 1/3/2007 w.e.f 11/5/2007

3. Rule 15 has been substituted vide notification no. 6/2010 CE(NT) dated 27-2-2010 w.e.f. 27-2-2010, before it was read as,

“[15. Confiscation and penalty.-

(1) If any person, takes CENVAT credit in respect of input or capital goods, wrongly or 1[in contravention of] any of the provisions of these rules in respect of any input or capital goods, then, all such goods shall be liable to confiscation and such person, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention has been committed, or 2[two thousand rupees], whichever is greater.

(2) In a case, where the CENVAT credit in respect of input or capital goods has been taken or utilized wrongly on account of fraud, willfulmis-statement, collusion or suppression of facts, or contravention of any of the provisions of the Excise Act or the rules made thereunder with intention to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of section 11AC of the Excise Act.

(3) If any person, takes CENVAT credit in respect of input services, wrongly or 1[in contravention of] any of the provisions of these rules in respect of any input service, then, such person, shall be liable to a penalty which may extend to an amount not exceeding 2[two thousand rupees]. 

(4) In a case, where the CENVAT credit in respect of input services has been taken or utilized wrongly by reason of fraud, collusion, willfulmis-statement, suppression of facts, or contravention of any of the provisions of the Finance Act or of the rules made thereunder with intention to evade payment of service tax, then, the provider of output service shall also be liable to pay penalty in terms of the provisions of section 78 of the Finance Act.

(5) Any order under sub-rule (1), sub-rule (2), sub-rule (3) or sub-rule (4) shall be issued by the Central Excise Officer following the principles of natural justice.]”

4. Substituted vide Not. 06/2015 – Dated 1-3-2015 w.e.f.  the date on which the Finance Bill, 2015 receives the assent of the President, before it was read as, “not exceeding the duty or service tax on such goods or services, as the case may be, or two thousand rupees, whichever is greater.” Further corrected vide F. No. 267/11/2015-CX. 8 – Dated 5-3-2015

5. Substituted vide Not. 06/2015 – Dated 1-3-2015 w.e.f.  the date on which the Finance Bill, 2015 receives the assent of the President, before it was read as, “section 11AC of the Excise Act.”

6. Substituted vide Not. 06/2015 – Dated 1-3-2015 w.e.f.  the date on which the Finance Bill, 2015 receives the assent of the President, before it was read as, “penalty in terms of the provisions of section 78″