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2014 (2) TMI 447 - BOMBAY HIGH COURTDenial of MODVAT Credit - credit taken in respect of PVC resin received during the period from 24th February, 1992 to 4th May, 1992 - Recover of credit under Rule 57-I of the Central Excise Rules, 1944 - contravention of Rule 57-I - IMposition of penalty - The basis of the demand of Rs. 25,87,588-90 is in relation to the utilization of credit availed for PU resin other than Grade 5702 in payment of duty on LBSP, though such inputs have not been used in manufacture of the said product. The appellate authority noted that use of PU Resin other than Grade 5702 was not made, but it was pleaded by the petitioner that other grades could be used ajnd the petitioner intended to use the same in manufacture of LBSP. The case of the petitioner noted by the CEGAT is that actual use need not be made as the petitioner was conducting various experiments. Inputs of only Grade 5702 were used by the petitioner. Perusal of the statements shows that the intention to use other grades is not at all reflected from the said statements. A mere desire to use the other grades in future or a mere possibility that the other grades may be used for manufacture of the final product is not sufficient for the purposes of Clause (i) of sub-rule (3) of Rule 57F. Therefore, the Collector and more specifically CEGAT were right in taking the view that the PU of other grades was never intended to be used - In the circumstances, the order of the appellate authority cannot be faulted with. As far as penalty is concerned, the same has been reduced to 1/4th by the Appellate Authority - Decided partly in favour of assessee.
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