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TMI Blog2013 (9) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... re was a valid reason for remanding of the case to the original authority for fresh decision on the question whether a penalty under Rule 15 of the CENVAT Credit Rules 2004 was warranted and, if so, to what extent - It appeared from the records that the penalty was imposed for contravention of Rule 3(1) read with Rule 10 of the CENVAT Credit Rules 2004. Rule 3 was a substantive provision providing for CENVAT credit as a benefit to be claimed by a manufacturer of final products or a provider of taxable service - This benefit was allowed on inputs, capital goods and input services - Rule 3 also specifies the purposes for which the credit can be utilized - There were also provisions under Rule 3 which deal with situations such as what to be do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock of 3405 Kgs of kraft paper to the Superintendent. In that letter, the unutilized balance of CENVAT credit was also communicated to the Superintendent. However, it appears, before the range officer could make stock verification at the Peenya premises of the appellant, the unit was shifted to Hubli. It further appears that, in a letter dated 5/4/2005, addressed to the Assistant Commissioner of Central Excise, Hubli Division, the appellant intimated the shifting of their plant and machinery along with raw material and the semi-finished stock to the Tarihal Industrial area, Hubli. In this letter, they also wrote that they continued to avail CENVAT credit and were transferring unutilized credit from Bangalore to Hubli. They also undertook t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside the demand of interest and sustained the rest of the order-in-original. Against the order-in-appeal, the party filed the present appeal while the department filed Appeal No. E/346/2007. The departments appeal against the dropping of the demand of interest came to be dismissed by this Bench vide Final Order No. 1371/2008 dated 8/12/2008. The present appeal of the assessee is against the penalty imposed by the original authority and sustained by the first appellate authority. 2. The main ground of this appeal is that the substantive benefit of CENVAT credit cannot be denied to the appellant on the technical ground that the credit was transferred without complying with the provisions of Rule 10 of CENVAT Credit Rules 2004. The wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit is allowed on inputs, capital goods and input services. Rule 3 also specifies the purposes for which the credit can be utilized. There are also provisions under Rule 3 which deal with situations such as what to be done with the CENVAT credit taken on inputs or capital goods when such inputs/capital goods are removed as such from the factory. As these situations are not relevant to the present context, there is no need of further discussion. Coming to Rule 10, I note that sub-rule (1) of this Rule provides for transfer of CENVAT credit lying unutilized in the accounts maintained by a manufacturer of final products, occasioned by shifting of his factory to another site, as in the instant case. This sub-rule indicates that such transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /4/2005. The learned Superintendent (A.R.) has submitted that the receipt of some of these letters cannot be confirmed. She has not been able to state the date of taking of CENVAT credit or the date of its reversal. I am unable to understand as to how the department sought to recover interest from the appellant without ascertaining these dates. Nevertheless, the taking of CENVAT credit and its subsequent reversal are admitted facts. In the penalty-related context, the question arises as to whether the appellant can be held to have committed serious breach of Rule 10 of the CENVAT Credit Rules of the CCR 2004. It appears from the records that they applied to the proper officer of Central Excise at Bangalore for transfer of this unutilized CE ..... X X X X Extracts X X X X X X X X Extracts X X X X
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