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TMI Blog2007 (4) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground that it was wrongly availed and had imposed penalty of the like amount under Rule 13 and Rule 25 of the said rules. 2. As per the appeal memo, the lower authorities did not consider the plea of the appellant that in textile sector even registered dealers could pass on higher credit subject to their making payment of that amount as per sub-rule (1) to Rule 3 vide Notification No. 34/2003-C.E. (N.T.), dated 10-2-2003. It is also contended that the removal of the goods should have been treated as removal of goods as such and, therefore, the credit could have passed on. It is also contended that even imposition of reduced amount of penalty was not justified. Moreover, it was only a procedural lapse, which should be condoned since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as, therefore, upheld, but the penalty on like amount imposed by the adjudicating authority was reduced from Rs. 1,06,034/- to Rs. 25,000/-. 5. The material on record abundantly established that the goods, namely bed sheets and blankets on which Cenvat credit was taken were not used by the appellant in or in relation to the manufacture of the final product and that the appellant had not done any manufacturing activity on them. Therefore, no credit could have been availed on these goods. Rule 3(4) contemplated removal of inputs as such, in which case the manufacturer of the final product is required to pay an amount equal to the duty of excise. The appellant was engaged in the manufacture of knitted fabrics and shawls and even the goods in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e excisable goods or Rs. 10,000/-, whichever was greater. Rule 13 of the Cenvat Credit Rules, 2002, has a dual scheme of penalty, one reflected in sub-rule (1), which is attracted when there is mere wrong taking of Cenvat credit or taking of Cenvat credit without taking reasonable steps to ensure that duty on the inputs or capital goods had been paid, as indicated in the document accompanying such goods or for contravention of any provisions of the Rules, as indicated thereunder. Penalty prescribed for such breaches not requiring a guilty mind was not to exceed the duty on excisable goods for which contravention was committed or Rs. 10,000/-, whichever is greater. However, under sub-rule (2) of Rule 13 when Cenvat credit taken or utilized o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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