CENVAT credit demand failed where alleged removal of inputs as such was unsupported by evidence and rested only on presumption.

A duty demand for alleged clearance of imported pure lead ingot as such could not be sustained because the record contained no affirmative evidence of excess CENVAT credit availment, diversion of inputs, or unauthorised removal without use in manufacture. The department's case rested only on presumption that imports were unnecessary because the assessee manufactured the same product, but the assessee's explanation that imports met a shortfall in requirement was consistent with normal business practice. In the absence of proof of contravention, the excise duty demand failed, and the consequential interest and penalty also could not survive.

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Issues: Whether the appellant had cleared imported pure lead ingot as such after availing CENVAT credit on the countervailing duty, so as to justify the demand of differential excise duty, interest, and penalty.

Analysis: The demand rested on the assumption that the appellant had no need to import pure lead ingot because it manufactured substantial quantities of the same product. The record contained no material evidence to show excess availment of credit, diversion of inputs as such, or clearance of imported goods without use in the manufacture of downstream products. The appellant's explanation that imports were made to meet shortfall in requirement was consistent with normal business practice, and the department's case was based only on presumption. In the absence of evidence establishing contravention, the demand for duty could not survive, and consequential interest and penalty also lacked foundation.

Conclusion: The allegation of clearance of imported pure lead ingot as such was not proved, and the duty demand, interest, and penalty were unsustainable.

Final Conclusion: The assessee's appeal succeeded and the revenue's challenge failed, resulting in rejection of the demand on the recorded facts and evidence.

Ratio Decidendi: A duty demand for removal of inputs as such cannot be sustained on mere presumption or business inference in the absence of affirmative evidence proving excess credit availment or unauthorised clearance.

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