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2016 (4) TMI 491 - AT - Central ExciseDenial of Cenvat credit and demand of duty - Clandestine removal of goods - Shortage of raw materials - Procurement of Bazar's scrap without cover of invoices - Excess production of finished goods as per private records maintained - Held that:- Revenue cannot deny the CENVAT Credit and simultaneously confirm duty liability on the finished goods. The shortage of raw materials on which CENVAT Credit is proposed to be denied has to be considered as used in the manufacture of finished goods along with Bazar's scrap illicitly procured by the Respondent for the manufacture of finished goods which have been cleared clandestinely and on which duty demand was correctly confirmed by the Adjudicating Authority. The evidences available on record are sufficient to confirm duty with respect to clandestinely removed goods and is required to be upheld by setting aside Order-in-Appeal. Appeal filed by the Revenue is allowed to that extent. However, it is observed from the case records that 25% option of reduced penalty under Section 11AC has not been extended to the appellant with respect to penalty. The same is extended to the appellant if the entire duty amount along with interest and reduced 25% penalty is paid within one month from the date of receipt of this order. Hence, so far as denial of credit is concerned, the demand is set aside and accordingly equivalent penalty imposed is also set aside. - Decided partly in favour of revenue
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