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2012 (5) TMI 82 - HC - Central ExciseCESTAT set aside the demand confirmed by Order in Original - duty was not paid on the inputs, the assessee could not have taken credit of the duty on those inputs Held that - Decision on the question as to whether the finished products were cleared without payment of duty or not was wholly irrelevant for deciding the question as to whether the inputs received by the assessee were duty paid or not - the decision of the Tribunal in setting aside the demand raised on wrongful credit taken on the inputs is erroneous - impugned order is set aside and the matter is remanded back to the Tribunal to decide the appeal on merits.
Issues Involved: Whether CESTAT was justified in setting aside the demand confirmed by Order in Original No.29 of 98 dated 26/6/1998.
Analysis: Issue 1: The primary issue in this case is whether the CESTAT was justified in setting aside the demand confirmed by Order in Original No.29 of 98 dated 26/6/1998. Analysis: The Order in Original dated 26/6/1998 had held that the assessee had erroneously taken credit of duty paid on inputs received from Sharp Industries Ltd. The duty was not paid on the inputs sold to the assessee by Sharp Industries Ltd., and thus, the assessee could not have claimed credit for the duty on those inputs. The CESTAT, however, set aside the demand based on its previous order in the Assessee's own case dated 01/10/2004, which dealt with a different issue regarding the clearance of finished products without payment of duty. The High Court observed that the decision on the clearance of finished products without payment of duty was irrelevant to the question of whether the inputs received from Sharp Industries Ltd. were duty paid or not. Therefore, the High Court found the CESTAT's decision to be erroneous and quashed the order dated 6/5/2005, remanding the matter back to the Tribunal for a decision on the appeal on its merits and in accordance with the law. Outcome: The High Court set aside the CESTAT's decision and remanded the matter back for a fresh decision, keeping all contentions of both parties open. The appeal was disposed of accordingly.
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