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2016 (12) TMI 16 - AT - Central ExciseIrregular availment of credit - MS items - Held that: - At the foremost, it has to be seen that the period involved is October 2008 to June 2009 which is prior to the insertion of the explanation w.e.f. 07/07/2009 to the definition of inputs. The MS items are contended to be used for fabrication of Mezannine floor which is between the ground floor and roofing and used for the purpose of storing the packing materials. The finished products being paint and varnishes, these have to be packed and only then can be cleared. Therefore the use of the MS items for fabrication of Mezannine floor can be considered to be connected with the manufacture of finai products. Further the period involved is prior to 07/07/2009. I therefore hold that the appellant is eligible for credit of ₹ 1,28,341/- availed on MS items. Imposition of penalty - Held that: - I hold that the penalty imposed in respect of credit already reversed by the appellant accepting the liability is unsustainable. The impugned order to the extent of demand of ₹ 1,28,341/- along with interest is set aside. Demand of ₹ 62,418/- is sustained. The penalties imposed are set aside. Appeal allowed - decided partly in favor of appellant.
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