2014 (4) TMI 504

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.....08.2009. The appeal was admitted on the following substantial questions of law:-         "1. Whether on facts and in the circumstances of the case, the second respondent Tribunal, Chennai was correct in passing its Final Order No.1086/09 dated 25.08.2009 in favour of the respondent in allowing their appeal by partly setting aside the demand of Rs.88,982/- and the penalty of equal amount thereto imposable under Rule 13 of Cenvat Credit Rules 2002 read with Section 11AC of Central Excise Act, 1944 and vacating the penalty of Rs.1,52,307/- under Section 11AC of Central Excise Act, 1944 while upholding the demand thereto?          2. Whether the 2nd respondent Appella....

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.... of CR Coils from the depot of TISCO and availed cenvat credit on such coils based on the dealer invoice supplied by the said depot. Out of the said lot, only 850 kgs were found to be in usable condition and the balance stock was in a rusted condition were cleared as scrap by paying duty of the value of scrap. Therefore, the assessee had to reverse the credit availed on the stock cleared and not duty on scrap value. The assessee admitted the contention raised by the Department and paid the differential amount of Rs.1,52,307/- on 05.10.2003. 5. The Department further stated that the assessee availed cenvat credit on inputs used in the manufacture of job work goods for HMI that were cleared without payment of duty and that the respondent had....

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....placed on record. 9. The point in issue to be decided in this appeal is whether equal penalty is leviable on the ground that although the amendment to Rule 3(4) of the Cenvat Credit Rules, 2002 was introduced on 01.03.2003, the assessee was not aware of the same, therefore, reversed the credit on the basis of the transaction value of the inputs, paid the differential amount in October 2003 and whether they could be held to be guilty of suppression of material facts with intention to evade payment of duty. 10. The Tribunal, after examining the facts pointed out that Rule 3(4) of the Cenvat Credit Rules, 2002 came into effect on 01.03.2003 and the assessee's plea that they were ignorant about such an amendment for some period of time wa....