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2017 (10) TMI 188 - AT - Central ExciseWrong Classification of products - CENVAT credit - inputs which had gone into manufacture of their final products - levy of penalty - Held that: - the entire issue was essentially in nature of classification dispute from the beginning and the issue has been going on since 1992 - the adjudicating authority has observed that the appellants mis-declared the description of the goods as the usage/utility was well known to them and they misclassified their product with intent to evade the duty. However, the issue is same in show cause notices in this appeal and before the Hon’ble Apex Court and the Hon’ble Tribunal. Since it was classification dispute, which attained finality in the Supreme Court judgment in 2005, and the classification declarations were being filed regularly and the issue was very much in the knowledge of the Department, allegations of mis-declaration of description/usage in these circumstances are unsustainable. In view thereof, the penalty in these show cause notices is also not justified. As a result of the classification of final products as decided by Hon’ble Supreme Court in O.K. Play (I) Ltd. vs. CCE, Delhi-III [2005 (2) TMI 114 - SUPREME COURT OF INDIA], the appellants would not be entitled to nil/concessional rate of duty and would be required to pay duty at the prescribed statutory rate in the Tariff during the relevant period. However, they would be entitled to the Cenvat Credit in respect of inputs used in manufacture of aforesaid final products on which duty has been paid. The matter is required to be remanded back to the adjudicating authority for quantification of the duty amounts on the final products and verification of proof of duty payment on the inputs - appeal allowed by way of remand.
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