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2016 (4) TMI 327 - AT - Central ExciseDemand of duty alongwith interest - Disallowance of Cenvat credit for short received coal as the quantity was not found short in other consignments - Coal was sent to Coal Washery for processing of coal so that it can be used in the manufacturing process - Appellant contended that The loss of weight due to removal of ash content, mud, fines occurred due to such coal washing process has to be considered as arising during the course of manufacture of final product and credit has to be allowed. Held that:- it is found from the records that since the other consignments of coal were not sent for washing, there was no weight loss. However, since the disputed nine consignments were sent for washing, the loss in weight has occurred. Thus, the reasoning advanced by the revenue cannot be a defensible ground for disallowance of Cenvat credit. The coal was sent for washing and the loss in weight occurred due to its processing as apparent from the records of the appellant. It is also found that the certificate issued by the 'Central Institute of Mining & Fuel Research, Bilaspur Unit (Council of Scientific & Industrial Research), Bilaspur (Chhattisgarh) working under Ministry of Science & Technology, Govt. of India clarifies that there is positive correlation between percentage of Ash reduction & loss of coal volume i.e. yield of washed coal and that on 1 % of Ash reduction in Coal there is volume loss of approx. 2.5%. Also as per IEA Clean Coal Centre of International Energy Agency loss in coal washery accounts for 20 - 30% loss through the separation process for mineral matter from the coal. Therefore, the reasons canvassed by the revenue for disallowing cenvat credit is not sustainable and also demand is not sustainable. Imposition of penalty - Held that:- there is no ground to impose penalty under Rule 15 of the Cenvat Credit Rules, 2004 as the demand is itself not sustainable. Further in SCN, no facts have been brought on record which can show the malafide intention or suppression on the part of the appellant. Therefore, that the penalty imposed on the appellant is also not sustainable. - Decided in favour of appellant with consequential relief
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