2003 (4) TMI 136

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....Grasim Industries Ltd. are challenging penalty imposed on them by the Commissioner under the impugned Order. 2. Shri A.R. Madhav Rao, learned Advocate, submitted that the Appellant manufacture woollen and cotton and man-made fabrics and avail Cenvat credit of duty paid on the inputs including yarn; that they removed yarn to their factories also on payment of duty by reversing the Cenvat credit ta....

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....ent of any duty of excise on any final products manufactured by the manufacturer or on payment of duty on inputs or capital goods themselves if such inputs are removed as such or after being partially processed or such goods are removed as such. He emphasized that the word used by the Legislature is that "duty on inputs or capital goods" which are cleared as such which goes to show that whatever a....

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....uts and not duty of excise; that this view is not correct as the relevant provision is Rule 57AB (1B) which provides for the utilization of Cenvat credits towards payment of duty on inputs removed as such. Finally, he mentioned that sufficient amount of credit was available even if the duty was to be paid on daily basis in respect of inputs removed as such. 3. Countering the arguments, Shri D.N. ....

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....envat credit can be utilized is for payment of duty or inputs or capital goods themselves if such inputs or capital goods are removed as such. We agree with the learned Advocate that what is being paid by a manufacturer at the time of removal of inputs or capital goods as such is duty which is evident from the provisions of Rule 57AB(1B). Sub-rule (1C) provides the manner for determining the amoun....