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2012 (12) TMI 853 - AT - Central ExciseWrong Availment of Cenvat Credit - procedure was not proper in contravention of provisions of Rule 6(1) r.w.e. III of the Rule 6(3) and Rule 6(3)(b) of the Cenvat Credit Rules, 2004 - Held that:- As decided in REPRO INDIA LTD. Versus UNION OF INDIA [2007 (12) TMI 209 - BOMBAY HIGH COURT] exempted goods can be exported under Bond/UT-1 in terms of Rule 19 of the Central Excise Rules, 2002. It has also been held that in terms of Rule 6(6)(v) of the Cenvat Credit Rules, 2004, the provisions of Rule 6(1) and 6(3) are not applicable in respect of excisable goods cleared without payment of duty for export under Bond. In view of this, the orders of Commissioner confirming the duty demand of CENVAT Credit cannot be sustained. Consequently, also set aside the order for recovery of interest on the dues. Wrong availment of CENVAT Credit on aggregates (i.e. IC engines, transmission assembly and sheet metal components etc.) used captively in the manufacture of exempted tractors cleared for export - Held that:- Parts of tractors are unconditionally exempted vide Sr. No. 92 of Notification No. 6/2006-CE dated 1.3.2006 when captively used in the manufacture of tractors within the factory. By virtue of Section 5A, Central Government may, in public interest, exempt either absolutely or subject to any condition (to be fulfilled before or after removal) as may be specified in the Notification, excisable goods of any specified description from the whole or any part of the duty of excise leviable thereon - upheld the demand of duty and also Commissioner's order for recovery of interest on these demands confirmed by the Commissioner - these demands were raised invoking normal period of limitation - ingredients of Section 11AC are not present in this case and, therefore, penalty equal to duty imposed by the Commissioner needs reduction - penalties to reduced to Rs. 1.25 crores and Rs.1 crore in respect of Appeal respectively - appeal allowed partly. CENVAT Credit of advertisement services used in relation to manufacture of tractors cleared within the country - Held that:- Assessee is not entitled to take the CENVAT Credit on advertisement services used in relation to manufacture of tractors cleared within the country. Therefore, the CENVAT Credit taken is to be reversed. So far as the interest is concerned, in terms of Rule 14 of the Cenvat Credit Rules, 2004, interest is payable from the date of taking wrong credit - penalty of Rs. 2000/- imposed on the assessee by the Commissioner is set aside.
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