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2012 (12) TMI 504 - AT - Central ExcisePenalty under Section 11AC of the Central Excise Act assessee availed CENVAT credit facility on the inputs received and, thereafter, these inputs were sent to the job-worker by following the procedure under Rule 4(5)(a) of the CENVAT Credit Rules,2004 - appellant failed to produce any evidence to show that they received the inputs after processing from the job-worker Held that - Rule 4(5)(a) of the CENVAT Credit Rules,2004 is self-explanatory, wherein the assessee is entitled to take credit on receipt of the inputs. Therefore, the appellant has not taken the credit with an intention to evade duty - appellant has already paid the duty along with interest, therefore, there is no contravention of the Rules or provisions of the Act with intention to evade payment of duty as required under Section 11AC of the Central Excise Act, 1944 for imposing penalty. Therefore, penalty imposed under Section 11AC of the Central Excise Act, 1944 is dropped but duty and interest already paid are confirmed
Issues: Appeal against penalty under Section 11AC of the Central Excise Act, 1944
1. Issue: Waiver of penalty under Section 11AC of the Central Excise Act, 1944. Analysis: The appellant, a manufacturer of motor vehicle parts, availed CENVAT credit on inputs sent to a job-worker under Rule 4(5)(a) of the CENVAT Credit Rules, 2004. Failure to produce evidence of receiving processed inputs led to a duty demand, interest, and penalty under Section 11AC. The appellant argued no intention to evade duty as credit was reversed promptly. The Tribunal noted Rule 4(5)(a) entitlement to credit on input receipt, determining no duty evasion intent. Consequently, the penalty was waived, but duty and interest were upheld. 2. Judgment: The Tribunal, after considering the submissions and records, found no contravention of rules or duty evasion intent by the appellant. As the duty and interest were paid and no deliberate wrongdoing was established, the penalty under Section 11AC was dropped. The appeal was disposed of with this decision.
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