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2016 (3) TMI 617 - AT - Central ExciseCENVAT credit on capital good utilised only for manufacture of finished goods, namely, cotton yarn, which was cleared under Notification No.30/2004-CE, dated 09.07.2004 without payment of duty - Held that:- It is seen that the impugned credit was reversed on 13.06.2005, i.e., before even the Show Cause Notice (dated 25.10.2005) was issued. Also it is just that in the initial phase the appellant cleared yarn duty free under Notification No.30/2004-CE. Both Notifications, i.e., Notifications No.30/2004-CE and No.29/2004-CE could be availed of simultaneously by the appellant and it could have cleared one small consignment of say mere ₹ 100/- on payment of duty under Notification No.29/2004-CE on the date it took the impugned Cenvat credit, in which case arguably, there would have remained no basis to initiate these proceedings. Thus, it is evident that there was no mala fide on the part of the appellant in the present case. Further, it is seen that the recovery of the impugned amount was ordered in terms of Rule 14 of CENVAT Credit Rules, 2004 read with Section 11A of Central Excise Act, 1944. As the impugned amount was reversed even prior to issuance of Show Cause Notice in this case, even issuance of Show Cause Notice to demand the impugned credit was not necessary. In these circumstances, imposition of penalty is not warranted in this case. The appeal is allowed by way of remand to the primary adjudicating authority for de novo adjudication with the direction that the appellant's contention that from 02.02.2006, the capital goods were utilised for manufacture of dutiable goods also should be examined and if found to be correct, then the impugned CENVAT credit should be allowed w.e.f. 02.02.2006.
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