2017 (3) TMI 513

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....round that the inputs was rejected due to some defects. In this case, the Cenvat Credit is not contested by the appellant. However, they are only contesting the imposition of equal penalty under Section 11AC as the demand is within the normal period. c) Duty of Rs. 2,36,608/- confirmed on the duty paid returned goods on the ground that the same were not cleared within six months from the date of return in terms of Rule 173H of Central Excise Rules, 1944 during the period 2003. d) Imposition of penalty of Rs. 2.00 lakhs each on the employee of the applicant, namely Shri K.N. Rajan & Shri M.K.R. Nair under Rule 26 of the Central Excise Rules, 2002. 2. Shri M.P.S Joshi, learned Counsel appearing on behalf of the appellant along with Shri....

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....mount, the appellant did not wish to contest and paid the duty. Moreover, the demand pertains to the normal period, where no proviso to Section 11A (1) is invocable. Accordingly, Section 11AC penalty was not imposable, the same may be set aside. 3. As regards the demand of Rs. 2,36,608/- on the return of goods, he submits that the applicant has been filing the D-3 intimation to the departmental officers in respect of return of duty paid goods. The only lapse is that the goods were not cleared within six months, which is a procedural lapse. The adjudicating authority decided this issue considering Rule 173H of Central Excise Rules, 1944 whereas the period involved is 2003 where Rule 173H was not existing. Even though it is a case of wrong m....

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....idered by the adjudicating authority in respect of reconciliation statement submitted by the appellant. We, therefore, direct the adjudicating authority to carefully verify reconciliation statement thereafter give an independent findings without getting influenced by the observations made by the Settlement Commission on this issue. 4.2 As regards the penalty imposed under Section 11AC corresponding to the duty demand of Rs. 76,612/- in respect of rejected inputs. We find that on the issue of admissibility of credit on the rejected inputs the issue is debatable. Moreover, the demand is for the normal period and not under extended period. Therefore, considering the overall facts of this issue, we are of the view that penalty under Section 11....