TMI Blog2017 (3) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... e the exercise was revenue neutral - there was no need for issue of SCN in respect of said issue i.e. the demand of ₹ 2,93,33,114/- - the question of imposition of penalty of said allowed violation does not arise. Whether removal of inputs as such by the manufacturer can be treated as trading activity? - demand - Held that: - clearance of inputs as such on which cenvat credit was availed does not amount to trading and in the present case allegations are made based on the presumption that such activity as trading. Therefore, that part of the Cause Notice is not sustainable. Appeal allowed - decided in favor of appellant. - E/1210-1211/2008-EX[DB] - A/70151-70152/2017-EX[DB] - Dated:- 19-1-2017 - Mr. Anil Choudhary, Member (Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponent related 4% of Additional Duty of Customs (SAD) was not reversed. The said component was computed to be ₹ 2,93,33,114/-. Further, it appeared to Revenue that certain input services were utilized by the appellants on such components and the Cenvat credit of said input services which was relatable to the components cleared as such was required to be reversed under Sub-rule (5) of Rule 3 of Cenvat Credit Rules, 2004 read with proviso to Sub-section (1) of Section 11A of Central Excise Act, 1944 therefore, the appellants were issued with a Show Cause Notice dated 03/04/2007 with proposals to recover Cenvat credit of ₹ 2,93,33,114/- and Cenvat credit of Service Tax of ₹ 9,69,144/- and proposal to appropriate ₹ 2,93, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Show Cause Notice was not eligible to be issued therefore question of imposition of penalty does not arise. Further, in respect of Cenvat credit of input service gone into the goods cleared as such they contended that there is no such provision in the law to treat the clearance of goods as such as trading. The Original Authority did not appreciate the submissions before him and confirmed the demand of ₹ 2,93,33,114/- and appropriated the amount already deposited. The Original Authority also directed the appellants to pay interest and appropriated interest of ₹ 11,00,082/- already paid. Further, the Original Authority confirmed the demand of ₹ 9,69,144/-. The Original Authority imposed penalty of ₹ 2,93,33,114/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs as such by the manufacturer cannot be treated as trading activity as held by this Tribunal in the case of Commissioner of Central Excise Service Tax, Ghaziabad Versus Mahaveer Cylinders Ltd reported at 2016 (341) E.L.T 361 (Tri. Allahabad). 4. Heard the Id D R. who has supported the impugned, Order in Original. 5. Having considered the rival contentions and on perusal of record we find that in the present case provisions of Sub-section (2B) of Section 11A of Central Excise Act, 1944 are applicable since the explanation I below the said Sub section is not invokable in the present case for the reason that Revenue could not establish that there was intention to pay less amount as compared to require amount because the exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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