TaxTMI 
TaxTMI 
2009 (11) TMI 762
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....themselves also did the job work for other manufacturers and in course of their job work activity, they received rough forgings for the further processing on job work basis from M/s. Punjab Tractor Ltd. (PTL), which after processing were sent back to them by the Respondent by availing full duty exemption under Notification No. 214/86-C.E. With effect from 8-7-04, the tractors became fully exempt from duty. Since M/s. PTL were using the parts received from the respondent for use in the manufacture of tractors and since the tractors w.e.f. 8-7-04 became fully exempt from duty, the parts manufactured on job work basis by the respondent were no longer exempt from duty under Notification No. 214/86-C.E. It is on this ground that a show cause not....
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....nvat has been used in the manufacture of the finished goods. 2. On appeal to Commissioner (Appeals) against the Assistant Commissioner's order, the Commissioner (Appeals) vide order-in-appeal No. 1039/CE/CHD/06 dated 27-10-2006 upheld the duty demand but allowed the Cenvat credit and also set aside the penalty. It is against order that the present appeal has been filed by the Revenue challenging the setting aside of penalty imposed under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of Central Excise Act and also permitting Cenvat credit on the invoice of M/s. PTL. 3. Heard both the sides. 3.1 Shri S.N. Srivastava, the learned Departmental Representative, reiterating the grounds of appeal in the Revenue's appeal, ple....
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....r job work had, in turn, been received by M/s. PTL from M/s. Samrat Forgings under Invoice No. 0241 dated 16-7-04, that the number of rough forgings were 1000 pcs., that M/s. PTL has not availed any Cenvat credit on the basis of this invoice for which on the invoice itself they have given a certificate that the goods covered under this invoice were dispatched to the respondent under Invoice No. 2-550140 dated 27-7-2004 along with Annexure No. 2312 dated 27-7-2004, that if the dispatch invoice No. 2-550140 dated 27-7-04 also mentions quantity as 1,000 pcs. of rough forgings, the Cenvat credit should be allowed as there may be a mistake in mentioning the weight of forgings and that in any case, to the extent the quantity is mentioned in the d....
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....e of this fact. In view of these circumstances, I hold that the penalty under Section 11AC cannot be imposed. However, penalty under Clause (a) of Rule 25(1) of Central Excise Rules, 2002 would be attracted for removal of excisable goods in contravention of the provisions of Central Excise Rules, as the job work tractor parts had been removed by the Respondent to the principal manufacturer without payment of duty, even though the same were no longer covered under Notification No. 214/86-C.E. It is settled law that for imposition of penalty under Clause (a), (b) & (c) of sub-rule (1) of Rule 25 which corresponds to Clause (a), (b) & (c) of Rule 173Q(1) of Central Excise Rules, 1944, no mens-rea is required to be proved. However, looking to t....