2008 (2) TMI 335

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....DR, for the Respondent. [Order]. - After taking note of the fact that the entire credit availed by the appellant stands reversed by them even before issuance of show cause notice, I dispense with the condition of pre-deposit of penalty amount and proceed to decide the appeal itself. 2. The appellants are engaged in the manufacture of excisable goods falling under Chapter 84 & 85 of Schedule ....

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....ow cause notice dt. 1-6-06, proposing imposition of personal penalty. The Assistant Commissioner vide order dt. 28-2-06 confirmed the reversal of modvat credit and payment of interest, but did not impose personal penalty on the ground that the reversal was not done by them on account of non-awareness of existing rule. He also agreed with the appellant that the rejected goods considered as scrap, w....

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.... if such goods are received as input under the Cenvat Credit Rules, 2002 and utilize this credit according to the said rules." As such, an assessee is entitled to take the credit of duty originally paid as soon as the goods are re-entered the factory. There is no dispute that all the particulars of such rejected and received back goods are entered in the record. Further, the provisions of sub-rule....

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.... or remaking only after receiving the goods in his factory and the said reversal of credit is required to be made if the goods are not manufactured, only at the time of removal of the goods from the factory. As such, strictly speaking, the appellant is not liable to reverse the modvat credit. However, Shri J.C. Patel, the learned Advocate appearing for the appellant submits that he is not contesti....