2008 (3) TMI 227

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....evant facts, in brief, are that the Respondents were engaged in the manufacture of doubling of yarn and the same was exempted from duty prior to 1-4-2003. On 13-11-2003, the Central Excise Officers visited the Respondent's factory and found that the Respondent were manufacturing the said goods without obtaining the Central Excise Registration and cleared the goods without payment of duty. They also seized 250 Kgs. of 100% Viscose Yarn lying at the factory premises. The Adjudicating Authority confiscated the seized goods and imposed redemption fine of Rs. 10,500/- and also imposed penalty of Rs. 10,000/- under Rule 25 of Central Excise Rules. He has also confirmed demand of duty of Rs. 2,43,841.00 and imposed penalty of equal amount under Se....

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....fore, penalty is not sustainable. He relied upon the decision of the Tribunal in the case of CCE, J & K (Jammu) v. M/s. Basantar Foundary & Fabrications -Final Order No. 351/2006-EX, dated 28-3-2006. He further submits that the Commissioner (Appeals) considered the facts and circumstances of the case and thereafter allowed the Cenvat benefit and reduced the penalty. He relied upon the decision of the Hon'ble Supreme Court in the case of T.N. Housing v. Collector of Central Excise reported in 1994 (74) E.L.T. 9 (SC). 5. After hearing both the sides and on perusal of the records, it is seen from the Adjudication Order that exemption was withdrawn on doubling of yarn w,e.f. 1-4-2003 and the Respondent being a Small Scale Unit, were not awar....

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....of final products alleged to have been removed clandestinely, assessee is entitled to claim Modvat credit on inputs used in manufacture of goods. In this case, I find that the Respondent during the visit of the Central Excise Officers produced the documents and claimed Cenvat benefit, therefore, the Commissioner (Appeals) has rightly allowed the benefit of Cenvat credit to the Respondent. It is admitted situation that the Respondent manufactured 250 Kgs. of 100% Viscose Yarn without obtaining any Central Excise Registration and, therefore, confiscation of the goods is justified, The ld. Advocate submits that the Tribunal as well as the Hon'ble High Court have taken a view that non-accountal of the goods found within the factory cannot be co....