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TMI Blog2025 (2) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... erse the balance amount of credit of Rs. 11,793/- on the differential amount of Rs. 76,730/-. Therefore, the appellant was liable to reverse the credit of Rs. 11,793/- wrongly retained by them. In fact, the appellant had agreed and actually paid the Cenvat credit of Rs. 3,067/- along with interest and penalty, but failed to pay the balance amount of Rs.8,726/-. There seems to be no error in the demand raised and confirmed in this regard. Reversal of the Cenvat credit in respect of labour cost - HELD THAT:- The appellant in their synopsis had submitted that they received a sum of Rs. 5,60,555/- towards the insurance claim which consisted cost of material of Rs. 4,83,825/- and the cost of labour of Rs. 1,56,717/-. From their own submissions, it is apparent that the amount received from the insurance company included the cost of labour and consequently, they were required to reverse the same. Time limitation - HELD THAT:- The allegation of wilful suppression to evade payment of duty has been made out and therefore, the invocation of the extended period of limitation is justified in the facts of the present case. Penalty imposed under section 11AC of the Act - HELD THAT:- The penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant had reported loss due to damaged goods valued at Rs. 4,83,825/- against which they had received insurance claim of Rs. 5,60,555/-. The appellant reversed the Cenvat Credit availed on the damaged goods valued at Rs. 4,83,825/- but failed to pay or reverse the balance credit of Rs. 11,793/- on the differential amount of Rs. 76,730/- of the value of the damaged goods and amount actually received through insurance claim hence, they were liable to pay or reverse the balance credit of Rs. 11,793/-. The appellant agreed with the audit objection and paid Cenvat credit of Rs. 3,067/- along with interest of Rs. 2,412/- and penalty of Rs. 460/-, but did not pay the balance amount of credit of Rs. 8,726/- along with interest penalty as applicable. Also that they had received the Cenvat credit amounting to Rs. 2,94,882/- of service tax paid on transportation charges on account of goods returned under Rule 16 of Central Excise Rules 2002. Show cause notice dated 03.09.2021 was issued which was confirmed by the adjudicating authority by order in original dated 30.05.2022 and by the impugned order. Hence, the present appeal has been filed by the appellant before this Tribunal. 3. Hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilize this credit according to the said rules. (2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be. [Explanation. - The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.] (3) If there is any difficulty in following the provisions of sub- rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Principal Commissioner or Commissioner, as the case may be."" 7. The first condition in Rule 16 is that the goods on which duty has been paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the decision by the learned counsel for the appellant in the case of M/s Jayaswal Neco Industries Ltd. Vs. CCE, Nagpur 2016 (44) STR 116 (Tri.-Mum) as the same has been passed de-hors the provisions of the CC Rules. 11. There is no reason to interfere with the findings that the ingredients to avail credit of duty of goods brought back to the factory, as contemplated under Rule 16(1) were not satisfied. The appellant having wrongly availed the benefit of the credit on the service tax paid on transportation charges is liable to reverse the said amount along with interest. 12. The loss due to damaged goods was valued at Rs. 4,83,825/- and against the same appellant received the insurance claim of Rs. 5,60,555/-, however, they reversed the credit on the amount of Rs. 4,83,825/- and failed to reverse the balance amount of credit of Rs. 11,793/- on the differential amount of Rs. 76,730/-. Therefore, the appellant was liable to reverse the credit of Rs. 11,793/- wrongly retained by them. In fact, the appellant had agreed and actually paid the Cenvat credit of Rs. 3,067/- along with interest and penalty, but failed to pay the balance amount of Rs.8,726/-. There seems to be no error i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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