2013 (12) TMI 1509

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.... is right in giving relief of Rs. 8,32,966/- to the assessees without considering the procedure laid down in the Notification No. 214/86-C.E. (as amended), dated 25-3-1986? (b)     Whether the CESTAT is right in holding that Modvat credit availed by an assessee was exactly equivalent to the amount of Excise duty paid by the input manufacturer without availing exemption, the consequence being revenue neutral and hence there could be no demand for reversal of the credit, in the light of the case law of Rosa Sugar Works v. CCE, Lucknow [2006 (194) E.L.T. 456 (Tri.-Delhi)], wherein, it was held that "Credit of charges paid to job worker for setting up/constructing vacuum pan is not admissible as credit is admissible on go....

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....ssee was however, rejected, quoting that the assessee was ineligible to avail Cenvat credit on goods received after processing, which are exempted under the Notification referred to above. Aggrieved by this, the assessee went on appeal before the Commissioner of Central Excise (Appeals), who confirmed the reasoning of the adjudicating authority. However, the Commissioner viewed that what was paid by Unit-I could not be considered as duty of Excise eligible for taking Cenvat credit. While confirming the demand under Rule 14 of the Cenvat Credit Rules along with interest under Section 11AB and penalty under Section 11AC of the Central Excise Act, 1944, the Commissioner thought it fit to set aside the penalty of Rs. 1 lakh imposed under Rule 1....

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....fication, the job worker was not entitled to claim exemption and merely on the remittance of duty by the job worker, the assesse was not entitled to Cenvat credit. We do not agree with the submission of the learned Standing Counsel for the Revenue. It is not denied by the Revenue that assessee had received the materials given to the job worker, and no proceedings were taken to set right the mistake committed by the job worker in remitting the duty. As rightly observed by the Tribunal, when the Modvat credit availed by the assessee, was exactly the same or equivalent to the amount of Excise duty paid by the input-manufacturer, the consequence would be revenue neutral. Hence, we do not find any justification to allow the appeal filed by the R....