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TMI Blog2016 (7) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... lant located in Kadimpathavaram is a grinding unit, which has a railway sliding facility. This unit received an order for supply of 43 grade cement with ISI Mark-The appellant received 43 grade cement from Mattampally factory and marked it with ISI mark and took credit of duty paid on the cement as input under Rule 16 of Central Excise Rules. While clearing the goods the entire credit was utilized. The department entertained the view that as cement is removed from Mattampally unit to Kadimpathavaram unit, the appellant cannot take credit on these goods as these are not inputs but finished goods. 2. A show cause notice was issued raising the above allegation, which after due process of law confirmed the demand of Rs. 11,17,971/- being the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not the case that the adjudicating authority had questioned the utilization of CENVAT credit towards payment of duty on clearance of cement from Kondapally. Thus, from the above, the dispute is with regard to the availment of CENVAT credit on the duty paid cement received from the Mattampally Unit. The demand for recovery of availment of Cenvat credit by the department/adjudicating authority is acceptable if ultimate exercise benefitted revenue by collection of duty, no such benefit accrues to exchequer in as much as the issue is revenue neutral" 4. The Commissioner (Appeals) took the view that the entire situation is revenue neutral and that credit is admissible. However, he further held that it is a procedural infraction and that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the appellants are liable to pay interest and the penalty imposed is reasonable. 7. I have heard the rival submissions. For better appreciation Rule 16 of Central Excise Rules, 2002 is reproduced as under: "RULE 16 Credit of duty on goods brought to the factory (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules. (2) If the process to which the goods are s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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