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TMI Blog2015 (7) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... e was received prior to 1994. Subsequently, finding no evidence for the same, they dropped the claim. Having regard to the facts and circumstances of the case, I consider that since the duty liability is not contested and even if it is not paid, learned counsel for the assessee has accepted the liability, the penalty can be waived. The reversal of credit is specifically under Rule 3 itself and instances where credits suffer reversal have been specified there itself. The Rule, as it exists after amendment of 2009, provides for reversal of credit when inputs where cleared 'as such' or written off in the books of account because the inputs became unfit for use. Another provision for recovery of Cenvat credit is available under Rule 14 of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s factory and have arrived at the stock position. Total quantity of lead concentrate lying in stock as on the date of closure of the lead plant was 625.940 MT and out of this, a quantity of 563.018 MT was cleared on payment of duty vide Invoice dated 29.3.2004. Remaining quantity of 62.922 MT (as per records) along with the quantity of 960 MT of lead concentrate in mixed form retrieved from plant floor lying as work-in-progress were available in stock. Department felt that Cenvat credit availed on this total of 1585.940 MT of lead concentrate is to be reversed as it cannot be further used in the manufacture, as the lead plant is closed. Accordingly, show-cause was issued demanding reversal of Cenvat credit of ₹ 24,66,758/- (after excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trate cleared on 29.3.2004. The remaining amount of ₹ 14,80,235/- is attributable to the Cenvat credit availed on 1022.922 MT of lead concentrate available in stock. The Commissioner (Appeals) confirmed the demand for ₹ 8,96,325/- taking a view that the appellant could not produce any evidence to show that this quantity of lead concentrate had been received by them prior to 1994. As regards remaining amount, he observed that there is no provision for demanding duty on the quantity lying in stock on the ground that it cannot be used by the manufacturer any further. He also observed that there are only two occasions when the reversal of Cenvat credit can be demanded i.e. one on clearance of inputs as such in terms of Rule 3(4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd even if it is not paid, learned counsel for the assessee has accepted the liability, the penalty can be waived. 6. Coming to the appeal filed by the Revenue, I find that the provisions in the Rule providing for payment of Cenvat credit availed in case of inputs which are written off or provisions are made for finally written off have been introduced in the statute only with effect from 7.7.2009. Even prior to this period, the Circular issued by the Board relied upon by the Commissioner (Appeals) clearly provides that only when the inputs are written off or provisions are made because of the reason that the inputs became obsolete or unfit for utilization, the credit has to be paid back. In this case, there is no evidence as rightly obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of Cenvat Credit Rules. This Rule provides for recovery of Cenvat credit wrongly taken or erroneously refunded. The Commissioner (Appeals) has discussed the provisions of Rule 3 relating to reversal and explained that situation in this case is not covered by the provisions. Rule 14 is not applicable since when the credit was taken on Zinc concentrate it was taken correctly and, it cannot be said that the credit was wrongly used since there is no such allegation. In this case, the provisions of Rule 14 are also not applicable. In these circumstances, I have to take a view that the appeal filed by the Revenue has no merit. 9. In view of above discussion, penalty imposed on the appellant equal to the amount of confirmed duty of ₹ 8, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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