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2015 (11) TMI 664 - AT - Central ExciseImposition of penalty - reversal of cenvat credit towards exempted goods after audit objection but before issuance of Show Cause Notice (SCN) - whether in the facts and circumstances of the case penalty is imposable on the appellant or not - Held that:- Admittedly, appellant is not maintaining separate account for input / input services which were being used for manufacturing of dutiable as well as exempted final product. It is also clear from the facts on record that at the time of availment of Cenvat Credit, it was not known to the appellant whether they will be clearing final product without payment of duty or not. Therefore, the allegation of suppression in these set of facts cannot be alleged against the appellant. As that is not known at the time of availment of Cenvat Credit whether these inputs will go in manufacturing of exempted goods. Further, on the legal aspect I find that the issue came up before the Hon ble High Court of P&H in the case of Sangrur Agro Ltd. (2010 (2) TMI 438 - PUNJAB & HARYANA HIGH COURT) wherein Hon ble High court has held that the case is related to reversal of amount under section 6(3)(b) of Cenvat Credit Rules 2004 penalty under section 11 AC is not imposable as the said provision are not applicable. Consequently, penalty under Rule 15 of the Cenvat Credit Rules 2004 is also not imposable. - Decided in favour of assessee.
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