TaxTMI 
TaxTMI 
2011 (3) TMI 1090
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....sions of Rule 4(5)(a) of the Cenvat Credit Rules, 2002/2004. The zinc dust produced by the appellants on their own account is sold to independent buyers as well as supplied to their unit at Vadodara on payment of central excise duty. For the purpose of supplying of zinc dust to their unit at Atladara, appellants adopted cost construction method. After a visit to the appellant s unit and further investigation of their activities, Revenue entertained a view that the assessee had not adopted the proper method for valuation of goods manufactured and cleared to their unit at Vadodara and there by there was a short levy of Rs.52,37,663/- during the period from April 2002 to May 2004. Further, it was also observed that appellants had availed cenva....
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....he method to arrive at cost followed by the appellant for supplies to other unit is not correct and the payment was made with interest. He submits that in this case, whatever amount paid by the appellant was available as cenvat credit to the other unit. Further he drew our attention to Annexure B to the show cause notice which reveals that during the period from 01.04.03 to 05.05.04, there was an excess payment of duty to the extent of Rs.19,35,450/-. The fact that there was an excess payment even according to department s calculation shows that appellant had no intention to evade duty and therefore the short levy has occurred because of the bonafide error. Further, he also drew our attention to the submissions made by the appellants whereb....
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....Rs.10,94,558/- being the cenvat credit taken on LDPE bags and furnace oil used in the manufacture of zinc dust manufactured on job work basis, it was submitted by the learned advocate that the issue is squarely covered by the decision of the Tribunal - Larger Bench in the case of Sterlite Industries Ltd. Vs. CCE reported in 2005 (183) ELT 353 (Tri. LB). We find that in Sterlite Industries Ltd. case also, the Revenue had proposed to deny modvat credit to the job worker on the ground that the inputs were used in the manufacture of goods which were cleared without payment of duty. After considering the issue in detail, the Tribunal had taken a view that modvat credit of duty paid on the inputs used in the manufacture of final product cleared w....
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....ad used it in further manufacture comes from the facts narrated in the show cause notice itself. In such a situation, we are surprised to note that the learned Commissioner has chosen to distinguish the decisions cited by the learned advocate before him stating that appellants have not produced any evidence. When there is no allegation in the show cause notice that goods were not manufactured on job work basis or the principal manufacturer had not paid duty, the need for producing any evidence does not arise. In this view of the matter, we find that the denial of the cenvat credit of Rs.10,94,558/- cannot be sustained and has to be set aside. Further, the penalty equal to this amount imposed by the learned Commissioner is also required to b....