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2010 (5) TMI 212 - CESTAT, NEW DELHICenvat/Modvat-Packing Material- . The appellants imported raw sugar in February, 2005 through Kandla Port. The appellants took credit of Central Excise duty paid on PP woven bags used for packing the raw sugar imported. The original authority in pursuance of the show cause notice held that they are not eligible for the credit and accordingly, ordered recovery of duty of Rs. 77,813/- along with interest and imposed equal amount as penalty. Commissioner (Appeals) has upheld the order of the original authority. Held that- use of inputs in the factory of production is a must. In this case, the packing materials claimed to be inputs has been used at Kandla and the officers have no means of verifying the relevant details which were required for the purpose of extending the Cenvat credit. Commissioner (Appeals) in upholding the denial of credit and demand of duty along with interest are justified. However, since the matter involved interpretations of the provisions of Cenvat Credit Rules, there being no suppression, misstatement on the part of the appellants, there is no justification for imposition of penalty.
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