2007 (11) TMI 135

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....requirement of pre-deposit is waived and the appeal itself is taken up for disposal. 2. In the impugned order, the Commissioner (Appeals) has sustained demand of service tax of Rs.4,40,536/- and vacated a penalty of Rs1 lakh imposed on the appellants. After going through the case records and listening to the arguments of both sides, it is seen that M/s. Chitrakoot Steel & Power Pvt. Ltd., the a....

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....x was availed are returned back and not used in the manufacture of final products or output service. According to him, sub-rule (5) of Rule 3 of the Cenvat Credit Rules, 2004 provided for payment of an amount to the department equal to the credit availed in respect of any inputs or capital goods when they are removed as such from the factory of the assessee. There is no similar requirement in resp....

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....re a product becomes exempted absolutely, in such cases, the Cenvat credit taken on inputs lying in stock, or in process or contained in the final product lying in stock should be reversed. Similar provision has been made in respect of cases wherein taxable service becomes exempted. However, no reversal of credit of input services is required to be made in such cases." This clarification amply ....

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.... to such inputs or capital goods when removed from the factory. Moreover, Rule 14 of the Cenvat Credit Rules, 2004 provides for recovery of Cenvat credit availed or utilised wrongly. In the instant case, the appellants had taken the credit correctly in terms of the statutory provisions. No provision exists in the Finance Act, 1994, which would render utilisation of such credit erroneous for the re....