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TMI Blog2008 (5) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Nitish Birdi, SDR, for the Respondent. [Order] - The subject appeal challenges the order of the Commissioner (Appeals) which confirmed the order of the original authority ordering recovery of wrongly availed credit of Rs. 1,82,454/- and demanding appropriate interest, He reduced the penalty of Rs. 18,000/- imposed under Rule 13(1) of the Cenvat Credit Rules, 2002, to Rs. 5,000/-. 2. The facts of the case are that M/s. Brakes India Ltd. (BIL), the appellant herein took Cenvat credit of duty paid on hose assembly received from M/s. Witchitra Auto Ltd. (WAL), Ambattur, during 5-2003 to 3-2004. The credit was utilized for removing other goods manufactured by it. The assessee exported the consignments of hose assembly received from W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t credit. Accordingly, he confirmed the demand and interest under Rule 12 of CCR, 2002, which expressly authorized recovery of such credit and interest for the delay in paying it back to the Government. 4. Before the Tribunal, the main ground taken is that the process of testing, inspection and packing of hose assemblies for export amounted to manufacture and duty paid on hose assemblies was admissible as Modvat credit when such tested and packed goods were exported under bond. It is also submitted that Modvat credit was admissible when inputs were exported under bond. If the appellants had operated as merchant exporter under Rule 18 of erstwhile CER, they would have received as a rebate the duty paid on the goods when they were exporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in the impugned order. 7. I have carefully considered the facts of the case records and the submissions by both sides. The Cenvat scheme is intended to obviate the requirement of the assessee having to pay duty on that part of its cost of final product representing the duty paid on inputs. The Cenvat Credit Rule 3 provides for availing credit of duty paid on inputs for payment of duty on the final products manufactured using the inputs. The rules do not bar such inputs also being cleared on payment of duty from the factory. However, the rules do not provide for an assessee taking credit of duty paid on inputs which are not used in the manufacture of final products and are procured solely for export under bond. Such transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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