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2016 (6) TMI 1017 - CESTAT HYDERABADDemand of excise duty - bonafide belief that manufacture of threaded roof bolts and nuts are not liable to duty of excise - exclusion of bought out items - manufacturing of threaded roof bolts and nuts - levy of penalty - Held that:- We find that the contention of the appellant that CENVAT credit has to be allowed on inputs and that bought out items have to be excluded from the demand raised is reasonable and acceptable. The credit admissible on inputs and value of bought out items has to be computed in order to determine the duty payable by appellants. Commissioner (Appeals) in an identical issue had held that the activity of making roof bolts did not amount to manufacture. Taking into these aspects and that the issue was an interpretational one, we hold that imposing penalty on appellants is unwarranted. Therefore the equal penalty imposed under Section 11AC of Central Excise Act, 1944 and the penalty of ₹ 10 lakhs imposed for not taking registration cannot sustain. While confirming the demand of duty with interest, penalty set aside. - Decided partly in favor of assessee.
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