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TMI Blog2016 (11) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... than the calculation of 16% Excise Duty. Subsequently, on their realization that they have in fact, not taken such excess credit, appellants took recredit of the same amount and informed the same to the department. They have also revealed the fact of such re-credit in the returns filed by them. Show cause notice was issued to the appellant seeking recovery of the said amount on the ground that the credit as availed by the appellant based on letter addressed to Range office is not proper in terms of Rule 3 (1) and Rule 9 (1) of Cenvat Credit Rules, 2004. Original authority has confirmed the proposed demand which has been upheld by the Commissioner (Appeals) also. Hence this appeal. 2. Ld. Counsel submits that the credit taken by them was v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellants are not entitled to CENVAT credit on Mobile Phones based on Board s Circular dated 20-6-2003, which is not applicable for the subsequent period from 10-9-2004 as the CENVAT Credit Rules, 2004 did not have any restriction of the kind which was placed under the earlier Service Tax Credit Rules, 2002. As such, the audit objection and the subsequent instruction of the departmental authorities which prompted the appellants to reverse the credit and pay the interest were clearly wrong. The Board has also accepted this position, while issuing a subsequent circular, dated 23-8-2007 in paragraph 8.3 thereof. As such, the erroneous reversal made by the appellants, prompted by wrong audit objection and an inapplicable circular, has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the original authority.
9. In view of the above finding, I set aside the demand of credit amount reversed for the period 10-9-2004 to Nov. 05, direct the original authority to consider the refund claim for interest paid for the period 10-9-2004 to Nov. 05 and also waive the penalty imposed on the appellants. The appellants are directed to deposit the amount equivalent to the credit, if any, for the period 1-9-2004 to 9-9-2004, within one month from the date of this order."
6. In view of the aforesaid discussions, I am of the considered opinion that the demand will not sustain. Accordingly, impugned order is required to be set aside which I hereby do. Appeal is allowed.
( Dictated and pronounced in open court ) X X X X Extracts X X X X X X X X Extracts X X X X
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