2009 (10) TMI 743

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....t notes in respect of inputs rejected during the course of manufacture and collected the material cost from the suppliers. Finding it as irregular, the department issued a show cause notice dated 20-6-2006 to recover the Cenvat credit availed on such rejected inputs. The Adjudicating Authority vide Order-in-Original No. 28/2006 dated 7-12-2006 confirmed the demand of the recovery of credit and also imposed penalty and also demanded interest from them. Aggrieved by such an order, respondent filed an appeal before the learned Commissioner (Appeals). Learned Commissioner (Appeals) vide the impugned order set aside the Order-in-Original and allowed the appeal filed by the respondent. 3. Learned JDR would draw my attention to the grounds of app....

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.... recovered not only for the item added by the final job worker but also the cost of earlier items used in that assembly. He would rely upon the Final Order Nos. 1658-1659/2005 dated 19-9-2005 passed by this Bench on the similar facts and circumstances. 5. I have considered the submissions made at length by both sides and perused the records. The issue involved is whether the respondent is eligible to avail the Cenvat credit in respect of inputs received and which were found defective at the time of processing. I find that the Adjudicating Authority in his Order-in-Original at paragraph 3.1.2 in the finding portion has clearly held that the components are rejected on the production line. It is explicitly indicates that the respondent had ut....