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2011 (7) TMI 608 - CESTAT, DELHIConfiscation and denial of credit - appellants, registered with Central Excise for manufacture of zarda, chewing tobacco - confiscation of the cut tobacco, found in excess, on the ground that they have not been recorded in the RG I register - confiscation of packing material - denial of modvat credit on the packing material found in excess - appellant submitted that cut tobacco was tobacco which was remnant after manufacturing activity and hence need not be accounted in the RG register as they are not finished goods - Held that:- If it is admitted fact that the goods which were found in excess were cut tobacco (as per panchnama) then there is no need to account them in the RG I register. In view of this, confiscation and demand of duty on 609 Kgs. of cut tobacco does not seems to be in accordance with the law. The demand is unsustainable, hence demand and confiscation on such cut tobacco are set aside. There is no allegation that packing materials were removed from the factory premises on which Cenvat credit was availed. Further, there is no provisions in the Rules which indicate to re-calculate the amount of Cenvat credit attributable to the excess goods found in the factory premises and raise a demand. In our considered view, the Cenvat credit reversal on the packing material could have been correct if they have been found short than the recorded balance. Order is set aside and the appeal is allowed.
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