2011 (8) TMI 163

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....bsp; During the course of Audit, it was found that the appellant had taken CENVAT Credit on the goods rejected by the customers and returned to the appellant. Appellant had cleared the said rejected goods as such at lower value and paid duty applicable at the lower value. In view of the Central Excise Rules, 2002, which provides that when the duty paid goods are brought back to any factory and ....

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....DR immediately pointed out that there was a clear finding by the lower authority that if the process amounted to manufacture and if any process was undertaken in the case of pharmaceutical products, the same batch number cannot be given and as per law the assessee is required to give a new batch number. In this case, there is categorical finding that in all the returned goods and their clearance, ....

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....show that CENVAT Credit has not been taken. However, I find that in reply to audit report itself, the appellant had taken this ground and subsequently the original adjudicating authority had examined the issue and in the case of one invoice viz. Sr.No.336, dt.30.11.06, he had allowed the benefit. However, I find that the original adjudicating authority had not at all discussed the invoice No.299, ....

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....t no option to pay duty, interest and penalty to the extent of 25% of the duty has been extended by the lower authorities. Therefore, following the decision in the case of Swati Chemicals Industries Ltd. reported in 2009 (248) ELT 421 and also the decision of the Hon'ble Gujarat High Court in the case of CCE Ahmedabad vs. M/s. Akash Fashion Prints Pvt. Limited reported in 2009 (93) RLT 471 (Guj.),....