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2016 (1) TMI 1248 - CESTAT HYDERABADImposition of penalty u/s 11AC of the Central Excise Act - confiscation - CENVAT credit - assessee opted for exemption from payment of Central Excise duty in terms of N/N. 8/2003 dated 01.03.2003. While opting to avail SSI exemption benefit as stipulated in the above notification, the assessee is required to reverse the CENVAT credit on inputs lying in stock and on inputs contained in finished and semi finished goods lying in stock - the reversal of credit is in dispute in the present case - Held that: - The appellant had been filing regular returns reflecting the credit availed by them. So also they intimated their intention to avail benefit of SSI exemption by filing letter to the Department dated 05.04.2003. It is also to be considered that the N/N. 8/2003 dated 01.03.2003 was a new notification during that period After filing letter opting for SSI exemption, the respondent has filed the quarterly returns on 17.07.2003 showing the reversal of credit of ₹ 3,500/-. This return was scrutinized by the department only in January, 2004 Meanwhile, the Anti-Evasion Wing conducted search in the premises of respondent. Thus search was before scrutiny of returns. The notice was issued to the appellant not on basis of the returns filed by the respondent. It is for this reason that Commissioner (Appeals) has observed that the department could have conducted scrutiny of the returns which disclosed the reversal of credit and called for details from the respondent. That the mistake ought to have been pointed out to the respondent even before search and SCN as the mistake is only a remedial mistake. In spite of the search conducted in the premises and verification of records done by the Anti-Evasion Wing of the Department, no case has been alleged against the respondent that the respondent availed wrong credit or that the respondent availed irregular credit with intent to evade payment of duty. This can only point to the conclusion that the credit availed by the respondent and the returns filed are proper and do not contain any discrepancy. Non-maintenance of input stock cannot be a criterion to conclude suppression when the stock can be arrived at by the quantity in process and by quantity of final products. Penalty set aside - appeal dismissed - decided against Revenue.
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