2012 (11) TMI 960

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.... Appellant R.K. Raizada, Adv. for the Respondent JUDGEMENT Barin Ghosh, Chief Justice 1. Rule 13 of the applicable Rules, at the relevant time, was as under:     "13. Confiscation and penalty:- (1) If any person, takes CENVAT credit in respect of inputs or capital goods, wrongly or without taking reasonable steps to ensure that appropriate duty on the said inputs or c....

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....le to pay penalty in terms of the provisions of section 11AC of the Act.     (3) Any order under sub-rule (1) or sub-rule (2) shall be issued by the Central Excise Officer following the principles of natural justice." 2. The facts to which there appears to be no dispute are that the assessee obtained Modvat credit on Welding Electrodes while clearing excisable goods manufactur....

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....ribunal, assessee relied upon a judgment of the Tribunal, whereby a similar case was remanded back; whereas the Department relied upon a larger Bench decision of the Tribunal, where it was held that modvat credit of Welding Electrodes, as an input or as a capital good, is not permissible. In view of absence of evidence to the effect that Welding Electrodes were used for fabrication of capital good....