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TMI Blog2014 (9) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... d by revenue also amplify the position. Commissioner (Appeals) despite accepting the facts on record, has tried to justify passing on higher credit by the respondents on a ground which is totally unlawful and flimsy. Further it is also evident that respondent i.e. M/s D.M. Engineering (Respondent No. 2) have not taken adequate steps to ensure that no extra credit is availed. Fraud prevention steps are inbuilt in Rule 7 (2) of Cenvat credit Rules 2002. Small effort at their level would have clearly brought out that original material has suffered duty @8% but credit has been passed on @12%. It is clearly established that M/s D.M. Engineering Ltd. (Respondent No. 2) has passed extra amount of credit by manipulating entries in record. Throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al No. 657/2007 in respect of M/s D.M. Engineering Ltd. (Respondent No. 2), when the matter was under process for writing the order, it was observed that appeal by first respondent namely M/s ABS Steel Ltd. has also been filed. To consider the matter in totality, appeal in respect of M/s ABS Steel Ltd. respondent was also got listed on 06.6.2014 so that consolidated decision could be taken. 3. Since matter in both the appeal is arising out of same Order-in-Appeal No. 125-126/RPR-II/2006 dated 15.12.2006, both appeals are taken up for disposal together. 4. Facts of the case are briefly stated to appreciate the issue. M/s ABS Steels Ltd, 137-A, Light Industrial Area, Bhilai (Respondent No.1) were engaged in the manufacture of H.B. wire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d willfully mis-stated the name and details of the M/s ABS Steels Ltd. (Respondent No. 1) as the manufacture whereas the M/s ABS Steels Ltd. (Respondent No. 1) was not the manufacturer of the said goods. Accordingly, the M/s D.M. Engineering Ltd. (Respondent No. 2) passed on the excess credit to the customers in contravention of the provisions contained in rule 3 of the said rules. Demand to the extent of ₹ 11,55,492/- and cess of ₹ 75,524/-, has been raised also proposing imposition of penalty on both the respondents alongwith recovery of interest. 6. After considering the submissions made by M/s ABS Steels Ltd (Respondent No. 1) and M/s D.M. Engineering Ltd. (Respondent No. 2), the Additional Commissioner, Central Excise, H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reference has been made, to case of Eicher Tractors reported in 2004 (175) ELT 277 (T), Following was reiterated. X X what as assessee is required to do when he removes inputs as such can only be to restore the credit which be had taken . Nothing more was required of them. (c) The Tribunal in the case of Lakshmi Machine Works Vs. CCE Coimbatore [2005 (184) E.L.T. 61 (Tri-Chennai) has, interalia, held that: If the assessee wants to remove the inputs as such, they have to comply with the condition specified in the rules. (d). The subrule 2 to rule 7 of the Cenvat Credit Rules, 2002 provides that the manufacturer or producer taking CENVAT credit on inputs or capital goods shall take all reasonable steps to ensure that the input ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt has been paid to the Government itself. On the other hand, the second appellant has taken the credit of the same amount as what was shown in the duty paying document. There is no evidence that the second appellant did this with ant intention. Even otherwise rule 13 (2) is applicable to manufacturer and not to a dealer. Therefore, this is not a case where either the first appellant or the second appellant had wilfully mis-stated or suppressed facts with intent to evade duty. In view of this the penalties imposed on both the appellants are set aside. Even the restriction placed on the second appellant is set aside. 10. On perusal of above facts, main issue which emerges for consideration is whether a dealer could have passed on higher ..... X X X X Extracts X X X X X X X X Extracts X X X X
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