2007 (2) TMI 493

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.... the inputs lying in stock and inputs contained in finished goods lying in stock as on 19-2-2004 under Rule 12 of the Cenvat Credit Rules 2002 and Rule 14 of the Cenvat Credit Rules, 2004. He has disallowed the credit of Rs. 8,46,41,994/- under the Rule 12/14 of the Cenvat Credit Rules. Interest on the above amounts has also been demanded. Penalty of Rs. 5,94,86,503/- under Rule 13(1) of the Cenvat Credit Rules 2002/Rule 15(1) of the Cenvat credit Rules 2004 read with Section 11AC of the Central Excise Act has been imposed. A penalty of Rs. 50,000/- has been imposed on Shri V.M. Joshi, Assistant Vice President under Rule 13 of the Cenvat Credit Rules, 2002 and Rule 15 of the Cenvat Credit Rules, 2004. 3. Shri G. Shiva Dass, the lear....

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....derabad - Final Order No. 1198/2005 dated 8-7-2005 (iii)   Further, w.e.f. 20-2-2004, the appellants manufactured Pipes which were cleared by availing exemption and on payment of an amount of 8% of the sale value. It is the department's contention that the Modvat credit of Rs. 3,50,04,285/- attributable to inputs lying in stock as on 19-2-2004 should be reversed. The learned Advocate urged that in terms of the following decisions, no reversal is required in respect of the credit legally earned. He relied on the following decisions. (a)      CCE, Rajkot v. Ashok Iron & Steel Fabricators - 2002 (140) E.L.T. 277 (Tri.-LB) (b)      TAFE Ltd. (Tractor Division....

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....t necessary to reverse the same consequent to a later exemption of notification. That view has been held in the case of CCE v. Ashok Iron & Steel and also TAFE Ltd. v. CCE vide Final Order dated 23-11-2006. The ratio of the above cases is squarely applicable. In these circumstances, the demand made by denying the Cenvat credit, is not in order, as the appellants had already paid 8% of the sale value of the goods in terms of Rule 6 of Cenvat Credit Rules. 5.2 Further, the learned Advocate urged that at each stage, while manufacturing exempted products as well as dutiable products, scrap was generated. Scrap was removed on payment of duty. Since scrap is a waste, it should be deemed as a final product in terms of Board's Circular F. N....