Appellant granted cenvat credits and reduced penalty by Tribunal.

The Tribunal ruled in favor of the appellant, allowing cenvat credits of Rs. 2,52,133 and Rs. 28,853 while reducing the penalty on the denied credit of Rs. 16,552 to 25%.

---

---

Issues:
Appeal against denial of cenvat credit.

Analysis:
The appellant, engaged in manufacturing steel items, appealed against the denial of cenvat credit on various grounds. The first issue revolved around the denial of credit amounting to Rs. 2,52,133 on inputs returned by a job worker, which the buyer had not returned to the appellant. The appellant argued that the goods were returned by the job worker directly to them after being found unsatisfactory, and they were entitled to the credit as they received the goods back. The Tribunal agreed, allowing the credit.

The second issue concerned the denial of Rs. 16,552 cenvat credit due to the alleged diversion of goods, which the appellant admitted and reversed, paying a penalty. The Tribunal acknowledged the appellant's actions in reversing the credit and paying the penalty, reducing the penalty to 25% of the credit amount as per Section 11 AC of the Central Excise Act, 1944.

The final issue involved the denial of Rs. 28,853 cenvat credit on Rubber Processing Oil, with the Revenue failing to provide evidence of non-receipt or diversion by the appellant. The appellant demonstrated that the oil was used as fuel in their factory, supported by expert opinion. As the Revenue could not refute this, the Tribunal ruled in favor of the appellant, allowing the credit.

In conclusion, the Tribunal held that the appellant was entitled to cenvat credits of Rs. 2,52,133 and Rs. 28,853, while reducing the penalty on the denied credit of Rs. 16,552 to 25%. The appeal was disposed of accordingly.

---