2010 (1) TMI 1055

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....credits were reversed by them prior to the issue of the show-cause notice in question. The show-cause notice, which invoked the extended period of limitation, proposed to appropriate the above debits in Cenvat account towards the demand of duty raised under the proviso to Section 11A(1) of the Act. It also proposed to impose a penalty on the respondent under Rule 13(2) of the Cenvat Credit Rules, 2002 read with Section 11AC of the Central Excise Act for the breach/violation of the Cenvat Credit Rules, 2002 'as discussed above'. The relevant allegation, raised and 'discussed' in earlier paragraphs of the show-cause notice, was that the noticee had violated the provisions of Rules 3 and 6 of the Cenvat Credit Rules, 2002. It was alleged, in o....

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....payment of duty were found against the respondent by that authority. 3. The learned Counsel for the respondent has contested this submission. He has also submitted that, during the material period, there was no legal obligation for the respondent to reverse the Cenvat Credit in question. It is pointed out that the liability to reverse Cenvat Credit on inputs or capital goods written off the records was introduced, for the first time, in May, 2007. It is submitted that prior to 11-5-2007, there was no such liability for a manufacturer of final product to reverse the Cenvat Credit taken on capital goods or inputs written off the books of account. It is argued that the fact that the credit was, however, reversed by the respondent should not b....