2009 (1) TMI 721 - AT - Central Excise

Summary

Issues involved: Appeal against demand under Rule 14 of CCR, interest under Section 11AB of the Act, and penalty under Rule 15(2) of CCR.

Summary:
The appeal was filed by M/s. Henkel India Ltd. against the demand, interest, and penalty imposed by the Commissioner of Central Excise. The issue arose when it was discovered that the company had removed stock of credit availed inputs without remitting the credit to the Government after leasing the factory to another entity. The Commissioner found that the company had suppressed this information and had not paid back the credit due to the exchequer, leading to the impugned order.

The appellant argued that there were no credit availed inputs in stock at the time of leasing the factory and that they had not removed any credit availed inputs. They contended that the demand and penalty were not sustainable, especially since the Show Cause Notice had invoked a larger period without justification. Citing relevant tribunal decisions, the appellant claimed that the impugned demand was not valid.

In considering the facts and submissions, the Tribunal referred to previous decisions where it was held that credit availed on inputs and capital goods is not recoverable as long as they are not removed from the factory and are used in or in relation to manufacturing final products. Based on this legal principle, the impugned order was set aside, and the appeal was allowed with consequential relief.