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TMI Blog2012 (3) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... llegation that the quantum of exemption availed is more than the duty payable on the specified value addition i.e. 34%. Thus even if the department’s allegation that the appellant have inflated the production figures is accepted, the fact remains that the refund they have received in respect of the inflated production is of the duty which they had actually paid. It is also not the case where the goods cleared by the appellant to a downstream manufacturer have been used by him as input and on the basis of the invoices issued by the appellant, the downstream manufacturer has availed full Cenvat credit in respect of the exempted goods under Rule 12 of the Cenvat Credit Rules, 2004. Thus, so far as duty demand of Rs. 1,44,78,352 is concerned, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 56/2002-C.E. issued under Section 5A(1) of the Central Excise Act, 1944 exempts the specified goods manufactured by the units located in the specified areas of the State of Jammu Kashmir from so much of the central excise duty and the additional excise duty leviable thereon as is equivalent to the duty payable on the value addition undertaken in the manufacture of the said goods by the said units. Para-2 of the Notification states that the duty payable on the value addition shall be equivalent to the amount calculated as a percentage of the total duty payable on the said excisable goods of the description specified in Col. 3 of the Table in this para and falling within the chapter of the central excise tariff as given in corresponding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end of the month exceeds the total duty payable and if the Cenvat credit available at the end of the month is less than the total duty payable, the quantum of exemption would be the difference between the duty payable and Cenvat credit available, subject to the cap of the duty on the value addition specified in Col. 4 of the Table in para-2. 2. The period of dispute in this case is from 2005-2006 to 17-7-2009. There are three allegations against the appellant :- (1) During this period, they inflated their production figures inasmuch as the production shown in their RG-I Register is much higher than the production ascertained on the basis of the records of the labour contractors. On this basis, the department has alleged that the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and another penalty of Rs. 16,93,436/- was imposed on the appellant company under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. 4. Against this order of the Commissioner (Appeals), the present appeal and stay application has been filed. 5. Heard both sides in respect of stay application. 6. Shri T.R. Rustogi, Advocate, ld. Counsel for the appellant, pleaded that the allegations of inflating the production figure and availing wrong Cenvat credit are without any basis, that the duty demand of Rs. 1,44,78,352/- is based on the allegation that the production figures have been inflated, that even if this allegation is accepted, the fact remains that the appellant have paid duty in cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is available as refund subject to the cap of duty on the value addition specified for the product in the notification which for the goods of Chpater 38 is 34%. It is also not the Department s allegation that the quantum of exemption availed is more than the duty payable on the specified value addition i.e. 34%. Thus even if the department s allegation that the appellant have inflated the production figures is accepted, the fact remains that the refund they have received in respect of the inflated production is of the duty which they had actually paid. It is also not the case where the goods cleared by the appellant to a downstream manufacturer have been used by him as input and on the basis of the invoices issued by the appellant, the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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