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TMI Blog2009 (10) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... it notes in respect of inputs rejected during the course of manufacture and collected the material cost from the suppliers. Finding it as irregular, the department issued a show cause notice dated 20-6-2006 to recover the Cenvat credit availed on such rejected inputs. The Adjudicating Authority vide Order-in-Original No. 28/2006 dated 7-12-2006 confirmed the demand of the recovery of credit and also imposed penalty and also demanded interest from them. Aggrieved by such an order, respondent filed an appeal before the learned Commissioner (Appeals). Learned Commissioner (Appeals) vide the impugned order set aside the Order-in-Original and allowed the appeal filed by the respondent. 3. Learned JDR would draw my attention to the grounds of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s recovered not only for the item added by the final job worker but also the cost of earlier items used in that assembly. He would rely upon the Final Order Nos. 1658-1659/2005 dated 19-9-2005 passed by this Bench on the similar facts and circumstances. 5. I have considered the submissions made at length by both sides and perused the records. The issue involved is whether the respondent is eligible to avail the Cenvat credit in respect of inputs received and which were found defective at the time of processing. I find that the Adjudicating Authority in his Order-in-Original at paragraph 3.1.2 in the finding portion has clearly held that the components are rejected on the production line. It is explicitly indicates that the respondent had u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts and used them in the manufacture of final products. The fact of the recovery of the cost of the wasted inputs should not be a ground for asking them to reverse the Cenvat credit availed, because it is not the Department's case that the inputs have been removed as such, without being put to use. There is no legal authority with the Department for such recovery. Also it is seen from the debit notes that the appellant has recovered only the cost of the material and not excise duty portion." 5.1 It can be seen from the above reproduced finding that the Commissioner has come to a factual finding that the cost which has been recovered them is a cost of the wasted inputs. Further, I find that the stand taken by the respondent that this issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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