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TMI Blog2018 (7) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... tain the contention of the petitioner's counsel that the Writ petitioner having rightly availed the Cenvat input credit originally, cannot be called upon to reverse the same, merely because it was stepping into exemption regime. This Court would fully concur with the contention of the petitioner's counsel that the Authority erred in levying the penalty equivalent to the amount demanded. Petition allowed - decided in favor of petitioner. - W.P.(MD).No.800 of 2018 and W.M.P.(MD)No.868 of 2018 - - - Dated:- 6-7-2018 - G. R. Swaminathan, J. For the Petitioner : Mr.J.Sankarraman For the Respondent : Mr.B.Vijay Karthikeyan, Senior Standing counsel for Customs and Central Excise. ORDER The Writ petitioner herein is a Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The proposal to levy interest and penalty was also set out in the said notice. The petitioner inexplicably did not respond to the said notice. Therefore, the order-in-original dated 27.03.2007 came to be passed. The Authority confirmed the demand for an amount of ₹ 20,01,120/- and also confirmed the interest liability. Penalty of ₹ 50,000/- was also imposed. Aggrieved by the same, the petitioner filed an appeal before the Commissioner of Central Excise(Appeals). By order dated 16.12.2008, the appeal was allowed and the matter was remitted to the file of the original authority. 5. After remand, the order impugned in this Writ petition came to be passed. The Authority not only confirmed the demand for an amount of ₹ 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion reads as under:- 17. It is clear from these Rules, as we read them, that a manufacturer obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgement thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the Rules which provides for a reversal of the credit by the excise authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilised, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the recent decision rendered by the Hon'ble Division Bench of Madras High Court reported in 2015 (320) E.L.T. 357(MAD) (Tractor and Farm Equipment Ltd., Vs. The Commissioner of Central Excise, Madurai and one other). After surveying all the earlier case laws including the one, that are apparently in favour of the Revenue, the Hon'ble Division Bench held as follows:- Once it is held that no co-relation between the raw material and the final product is required, the appellant's plea stands answered. If credit can be taken against excise duty on a final product manufactured on the very day, it makes it abundantly clear that there need not be co-relation between the input and the goods cleared and as a result, validly taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the learned counsel for the petitioner that the demand was unsustainable, there is no need to go into the correctness of imposing penalty equivalent to the amount demanded. But still it would be in order to make a remark or two. Admittedly, the Authority originally levied only a penalty of ₹ 50,000/-. The matter was taken on appeal. The Department did not prefer any cross appeal contending that the penalty amount was inadequately levied. The appeal Authority allowed the Writ petitioner's appeal and remanded the matter. But after remand, the penalty was enhanced from ₹ 50,000/- to a sum equivalent to the amount demanded. As rightly pointed out by the petitioner's counsel, the petitioner cannot be put in a worse position ..... X X X X Extracts X X X X X X X X Extracts X X X X
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