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2017 (5) TMI 383 - CESTAT HYDERABADCENVAT credit - clandestine removal - there was an attempt of burglary for clandestine removal of Nickel (input) from the appellant factory - case of Revenue is that inputs (Nickel) has been removed from the factory on which credit has been availed. Rule 3(5) provides that when inputs are removed as such, without being used in manufacture of final products, the assessee is liable to reverse the CENVAT credit availed on such inputs - Held that: - The adjudicating authority has not relied upon the General Manager’s report which reports removal of 23 tonnes of Nickel. The adjudicating authority states that it is based on tampered documents. When the department has issued show-cause notice basing upon the figures stated in such report, the adjudicating authority cannot brush aside such report lightly. It has to be supported by reasons. It is not disputed that the documents regarding the issuance / removal of Nickel were lost in fire. It is also revealed that such fire was not by accident but articulated. Whether these incidents of clandestine removal of Nickel and articulated fire with intent to destroy documents will constitute deliberate acts of suppression has to be examined. All these issues need to be reconsidered - matter on remand. The plea of appellant that they have reversed the credit prior to utilisation has to be looked into - matter on remand. Appeal allowed by way of remand.
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