https://www.taxtmi.com/caselaws?id=51441 Modvat credit is not retained where duty-paid inputs are only cut into pieces, a process not amounting to manufacture, and are then sold without being used in or in relation to manufacture of the final product. In that situation, under the proviso to Rule 57F(1), duty on removal cannot be less than the credit already allowed under Rule 57A, so credit equivalent duty remains payable, subject to adjustment of duty already paid. Penalty does not follow automatically from the duty demand and requires an independent factual basis; on these facts, the record did not justify penal action. en-us Thu, 21 Feb 2002 00:00:00 +0530 Fri, 24 Sep 2010 17:35:58 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=51441 Modvat credit is not retained where duty-paid inputs are only cut into pieces, a process not amounting to manufacture, and are then sold without being used in or in relation to manufacture of the final product. In that situation, under the proviso to Rule 57F(1), duty on removal cannot be less than the credit already allowed under Rule 57A, so credit equivalent duty remains payable, subject to adjustment of duty already paid. Penalty does not follow automatically from the duty demand and requires an independent factual basis; on these facts, the record did not justify penal action. Case-Laws Central Excise Thu, 21 Feb 2002 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=51441