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2014 (3) TMI 790 - CESTAT NEW DELHICENVAT Credit - avaling Credit while availing duty drawback - Benefit of Notification No. 29/2004-C.E - Penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 15 of Cenvat Credit Rules, 2004 - Held that:- Credit taken in ER-I return of December 2005 for inputs received during Feb. and March 2005 is illegal for the reason that during the said period, the Appellants were required to maintain separate account of inputs used in the manufacture of dutiable products if they were to claim Cenvat credit. Further, it is also on record that the Appellants were claiming drawback and they could not have claimed drawback and Cenvat credit together. Having operated under a scheme where they had to forgo the Cenvat Credit Rules till November 2005, they are not entitled to take credit for input used in the previous period as opening balance in the return of December 2005. There is no affirmation that during 2005 they were maintaining separate accounts. Rule 15 of the Cenvat Credit Rules, 2004 does not mandate that a penalty equal of the credit regularly taken has to be imposed. The Rule prescribes that penalty not exceeding such credit amount shall be imposed. Therefore, in the facts of the case, I am of the view that penalty of Rs. 90,000/- under Rule 15 of the Cenvat Credit Rules will be sufficient to meet the ends of justice in this case - Decided partly in favour of assessee.
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