2017 (3) TMI 775

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.... the appellants are engaged in the manufacture of Plastic Films/Sheets, PP Bags and Tubing Rolls falling under CH 39 of the CETA, 1985. The appellant s factory was visited by the Central Excise officers on 10.7.2007 and on carrying out the stock taking exercise, shortage of around 33144.250 kgs in the stock of inputs on which Cenvat Credit availed by the appellant was noticed; no discrepancy was noticed in the stock of finished goods. Thereafter, on completion of investigation a show cause notice was issued to the appellant on 9th April 2008 alleging wrong availment of cenvat Credit of Rs. 17,88,402/- during the period 2003-04 to 2007-08 besides Rs. 3,38,365/- on the shortage of stock of Inputs noticed. On Adjudication, the demand was confi....

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....uming without admitting they have used their own inputs in the manufacture of job work goods; it is not in dispute that the Appellant had returned the job worked goods to the principal manufacturer, who in turn, cleared the same on payment of duty. Hence, the appellant cannot be directed to reverse the credit on the inputs allegedly used in the processing of job work goods. In support, he referred to the judgment of Larger Bench in the case of Sterlite Industries (I) Ltd 2005(183)ELT.353 (Tri.LB) later approved by the Hon'ble Bombay High Court reported as CCE Vs. Sterilite Industries Ltd. 2009 (244) ELT A89(Bom.), Jainsons Wool Combers Ltd 2011(268)ELT.360 (P&H), Happy Forging Ltd 2011.TIOL.34.HC.P&H .CX, Bharat Fritz Werner Ltd 2007(218)EL....

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.... by the Ld Advocate in the cases of Sterlite Industries (I) Ltd, Jainsons Wool Combers Ltd, Happy Forging Ltd , Bharat Fritz Werner Ltd, Escorts Ltd etc. Also, I do not find any allegation in the show cause notice that the inputs were cleared in the guise excess of wastage and required to be reversed being not used in or in relation to the manufacture of finished goods. In these circumstance, the demand of Rs. 17,88,402/- confirmed by the lower authorities below is liable to set aside. 6. Also, I find that both the authorities below while confirming the Cenvat Credit on shortage of Inputs though imposed equivalent penalty under Rule 15(2) of CCR,2004 read with Sec. 11AC of CEA,1944 but not extended the benefit of discharging 25% of the p....