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TMI Blog2016 (10) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... and imposition of penalty against the appellants viz., Gem Granites. 3. Appellants have been represented by learned advocate, Shri G. Shivadass, who inter alia submits as follows: * M/s. Gem Granites are 100% EOU. They manufacture cut and polished granites and are registered under Central Excise Act, 1944. * The appellants have been granted private bonded warehouse license under Section 58 of the Customs Act, 1962 and in-bond manufacturing sanction order under Section 65 of Customs Act, 1962.Consequent to the withdrawal of the warehosuing facility, the CBEC vide Circular No. 799/32/2004 CX dated 23.09.2004 clarified that EOUs could receive goods on payment of duty and take CENVAT Credit of the duty paid thereon. In the ligh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Penalty Imposed Rs. 7,50,000/- Rs. 3,50,000/- Rs. 2,00,000/- 3.1 The appellants mainly argue against the orders confirming the demand and imposing penalties inter alia as follows: i. The facility of Cenvat Credit was extended to EOUs w.e.f. 06.09.2004 vide Notificaiton No. 18/2004-CE(NT) dated 06.09.2004 which amended Rule 17 of the Central Excise Rules, 2002 to enable EOUs to pay duty on clearances made to DTA by utilizing Cenvat Credit. The amended provision made it clear that the Appellants are entitled to avail Cenvat Credit and utilise the same towards payment of duty. In view of the above, the Appellants became eligible to avail Cenvat Credit of the duty paid on inputs and to utilize the same for payment of duty on clearances m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue before the Hon'ble Tribunal was whether the Appellants are entitled to avail CENVAT Credit of the duty paid on High Speed Diesel Oil. The Appellate Tribunal observed that since the assessee is a 100% EOU, the Notification makes them entitled to take Credit. vi. The Appellants further submit that it is always the legislative intent that duty incidence on procurements of EOU be Nil. Here the EOU procures HSD on payment of duty, the supplier is extended deemed export drawback in terms of Para 8.3 of the FTP. Therefore, where the supplier has not availed the deemed export drawback, the EOU would be entitled to avail CENVAT Credit of the duty paid on HSD and utilise the same towards payment of duty in terms of Rule 17 of the Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing case laws in support of the impugned orders. (i) Sangam Spinners vs. UOI: 2011 (266) E.L.T. 145 (S.C.) (ii) Imperial Granites (P) Ltd. vs. CCE, Guntur: 2012 (276) E.L.T. 174 (AP) (iii) Imperial Granites P. Ltd. vs. CCE, Guntur: 2010 (256) E.L.T. 610 (Tri.-Bang.) 5. We have carefully considered the full facts of the case and submissions of both the sides and the case laws cited. 6.1 The main issue concerns with the CENVAT credit taken by the appellants who are a 100% EOU. The Revenue s contention is that appellant is not entitled to take CENVAT credit as the definition of input given in Rule 2(k) excludes light diesel oil and high speed diesel oil or motor spirit. The appellant on the other hand cites the Notification No.22/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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