Tribunal Overturns Order: CENVAT Credit of Rs. 53.86 Lakh Restored, Penalty u/s 11AC Revoked.

The Tribunal set aside the impugned order disallowing CENVAT credit of Rs. 53,86,781 and imposing a penalty under section 11AC of the Central Excise Act, 1944. The appellant's argument, referencing Ajinkya Enterprises v. Commissioner of Central Excise, Pune-II, was accepted, as the duty paid exceeded the CENVAT credit availed. Consequently, the appeal was allowed, aligning with the precedent approved by the Hon'ble HC of Bombay.

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Issues: Disallowance of CENVAT credit and imposition of penalty under section 11AC of Central Excise Act, 1944.

Analysis:
1. The appeal was filed against an order disallowing CENVAT credit of Rs. 53,86,781 and imposing a penalty under section 11AC of the Central Excise Act, 1944. The appellant had imported 'CARTAP Hydrochloride Technical' and cleared it without manufacturing, paying appropriate central excise duties. The appellant argued that since the subsequent payment of central excise duty on clearance of goods not manufactured would reverse the ineligible CENVAT credit, no further proceedings should be taken against them, citing the Tribunal's decision in Ajinkya Enterprises v. Commissioner of Central Excise, Pune-II.

2. The Authorized Representative supported the original authority's findings and urged acceptance of the impugned order. In Ajinkya Enterprises, the Tribunal concluded that the duty paid by the appellants exceeded the CENVAT credit availed, thus no reversal of credit was required. Following this precedent, the Tribunal set aside the impugned order and allowed the appeal, in line with the decision approved by the Hon'ble High Court of Bombay.

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