9911796707
TMI Blog2007 (4) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... admissible under Rule 3 of the Cenvat Credit Rules, 2002 and imposing reduced penalty of Rs. 25,000/- under Rule 13 of the said rules. The Assistant Commissioner had disallowed the Cenvat credit and ordered its recovery under Rule 12 read with Section 11A on the 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 shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It was held that the goods did not qualify the definition of "inputs" and, therefore, no credit could be taken or utilized for these goods. It was also held that analogy of sale of goods as such, was not relevant. The order of recovery of inadmissible Cenvat credit was, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n manufacture, production or storage without having applied for the registration or contravened any of the provisions of the Rules or the notifications with intent to evade payment of duty, the penalty besides, confiscation, that is prescribed was not to exceed the duty on the 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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