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TMI Blog2013 (6) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... he import cost of the goods in question. In this amendment application, the petitioner has also prayed for quashing the letter dated 12.1.2006 to recover Rs.1,75,277/- towards balance amount and interest. 3. We have heard Shri Abhishek Anand assisted by Shri Nishant Mishra for the petitioner. Shri Ashish Shukla appears for the Central Excise Department. 4. The petitioner is a Public Limited Company engaged in the manufacture of generic as well as patent and proprietary medicines (exisable goods) falling under Chapter-30 of the Central Excise Tariff Act, 1985. The petitioner is also availing the benefit of MODVAT/CENVAT credit of duty paid on inputs used in the manufacture of excisable goods under Rule 57-AA to 57-AK of the Central Excise Rules, 1944. 5. By a Notification No.36/2000-CE dated 4.5.2000, one of the excisable goods manufactured by the petitioners namely Intravenous Fluides (I.V. fluids) was exempted from payment of excise duty. On 3.5.2000 the petitioner had a closing balance of inputs for I.V. fluids in which inputs were used and on which the petitioner had availed MODVAT/CENVAT credit. A show cause notice was issued on 16.4.2001 proposing to recover CENVAT credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a letter dated 21.2.2003 the Superintendent, Central Excise, Range-V, Ghaziabad asked the petitioner to deposit Rs.38,22,164/- which according to him was the demand as confirmed by the CEGAT. The petitioner replied on 3.3.2003 that the CEGAT has confirmed the demand only to the extent of inputs lying in stock. The demand on inputs contained in finished goods was not confirmed by the CEGAT and therefore, there was no question of depositing the amount. 10. The Assistant Commissioner, Central Excise, Division-V, Ghaziabad issued a notice on 8.10.2003 informing the petitioner that he has been authorised by the Commissioner under Section 142 (1) (c) (ii) of the Customs Act read with Rule 4 of the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995, to recover Rs. 20,95,985/- from the petitioner. The petitioner submitted a reply on 21.10.2003, alleging that the CEGAT has confirmed the demand only to the extent of inputs lying in stock as such. On the finished goods, the demand was not confirmed by the CEGAT. The petitioners by its letter dated 19.11.2003 also informed the Commissioner of Central Excise, Ghaziabad that CENVAT credit availed at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistant Commissioner, Central Excise Division-V, Ghaziabad it is stated that 1.V Fluid was exempted from whole of central excise duty vide notification No. 36/2000 dated 4th May, 2000. The petitioner by its letter GCS/MCV dated 5th May, 2000 informed that they will clear their goods (I.V Fluid) at nil rate of duty as per notification dated 4.5.2000 and also declared that their stock of inputs and inputs contained in the manufactured product. In the said letter the petitioner reversed the credit of Rs.17,62,940/- involved in inputs used for the manufacture of finished goods and Rs. 17,38,571/- on the stock of raw material lying as on 3.5.2000. The petitioner did not work out the amount of reversal on the basis of "first in and first out". The petitioner on being asked by the Range Superintendent revised the said chart and the final amount which was to be reversed on the stock of inputs contained in the exempted final product came to Rs.20,95,985/-. On scrutiny it was found that the petitioner had included an amount of Rs.16,078/- in the amount shown to be reversed but that the petitioner had not availed the credit of that amount and therefore the amount was reduced by Rs. 13,38,571 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, Assistant Commissioner, Central Excise Division-V, Ghaziabad as follows:- "7. That content of para 19-B (a), (b), (c), (d) it is admitted as minimum price was fixed to protect the interest of the petitioner to realize the maximum price by way of auction and it was in accordance with law and the procedure laid down in the Circular issued by C.B.E.C i.e. Circular No. 365/81/97-Cx dated 15.12.97 and sale conducted as per guideline given in C.B.E.C letter dated 2.4.1952 i.e. 27 (1) CUS/1/51. The averment contrary under para reply is vehemently denied as it being misconceived. 10. That in reply to the content of para 19 (f) it is stated that it is incorrect to allege that procedure were flouted in conducting the auction. In facts auction was conducted circular issued by C.B.E.C i.e circular No. 365/81/97 Cx dated 15.12.97 and sale conducted as per guideline given in C.B.E.C letter dated 02.4.52 i.e 27 (1) CUS/1/51. The averment contrary under para reply is vehemently denied as it being misconceived incorrect. 12. That the content of para 19 (h) it is not admitted as the 1st auction was conducted on 21.3.1995 with the reserved price of Rs. 71,120/- only P.M.T. where in the highest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no provision for reversal of credit. Now there is a specific provision in Rule 57-AD which clearly provides that "CENVAT Credit shall not be allowed on such quantity of inputs, which is used in the manufacture of exempted goods." Rule 57-AH contains the provision for the recovery of CENVAT Credit utilized wrongly. As the inputs have been utilized in the manufacture of wholly exempted goods credit taken in respect of such inputs is recoverable. The demand is not hit by the time limit as the recovery is related in the instant matter to utilization of inputs for manufacture of exempted goods. As the show cause notice has been issued within one year of such utilization, demand is within the time limit specified in the Act and Rules. We are, however, of the view that in the facts and circumstances of the case, no penalty is imposable on the appellants. We order accordingly. 6. The Appeal stands disposed of in above terms." 23. The CEGAT confirmed the demand of Rs.38,22,164/- against the petitioner under Section 11-A of the Central Excise Act. Since the amount of Rs. 17,26,179/- was already deposited, the same was adjusted against the demand. The CEGAT allowed the relief to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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