2005 (9) TMI 127 - AT - Central Excise

Summary

Issues: Denial of benefit of Notification No. 30/2004-C.E. and imposition of penalty by the Commissioner of Central Excise

In this case, the Commissioner of Central Excise denied the benefit of Notification No. 30/2004-C.E. to the assessee, leading to a demand of over Rs. 66 lakhs and a penalty of Rs. 10 lakhs. The Commissioner based this decision on the assessee reversing input duty credit on specific dates in relation to inputs in stock, inputs in process, and inputs in finished goods. The Commissioner also referenced the proviso to the Notification which stated that the benefit does not apply to goods where duty credit on inputs was taken under the Cenvat Credit Rules, 2002. Despite the assessee providing evidence of reversing the input duty credit and relying on a Board's Circular allowing such actions, the Commissioner denied the benefit of the exemption.

The Appellate Tribunal, after examining the records and hearing both sides, found that the appeal needed to be disposed of at that stage. They noted that the assessee had indeed reversed the entire CENVAT credit on inputs related to finished products, making them eligible for the benefit of Notification No. 30/2004-C.E. Consequently, the impugned order was set aside, and the appeal was allowed.