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2018 (5) TMI 1712 - AT - Central ExciseRecovery of CENVAT credit - goods received after being returned by their customers for reprocessing under rule 16(1) of the CER 2002 - the allegation is that the appellants have not shown in their RG23 Part- I Register that the goods were returned by their customers and were accounted for - Held that:- There is no dispute that the appellants have maintained a separate register of the returned goods and have taken credit of CENVAT under Rule 16 without following the requirement of entering the details in RG 23A Part-I. However they have entered the details of the credit in RG 23 A Part-II - It is a well settled principle that the substantive benefit of CENVAT cannot be denied for procedural lapses - Credit of duty paid on the returned goods under Rule 16 allowed. Penalty u/s 11AC - element of fraud, collusion, wilful misstatement etc. not present in the SCN - Held that:- in para 6 of the SCN not only is there an allegation of irregularity but there is also an allegation of evasion of duty of excise on all the four counts - penalty not imposable. CENVAT credit - inputs found short - case of appellant is that there was some process loss - Held that:- Appellant relied upon the case laws of the Tribunal HINDUSTAN COPPER LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BELAPUR [2012 (9) TMI 858 - CESTAT MUMBAI]. These case laws pertain to cases where there was a presumption by the department that goods have been manufactured and removed or inputs have been removed using the fixed formula without accounting for the process loss. The decision was that process loss must be reckoned. Such is not the case here and the ratio does not apply to this case because allegation here is that whatever stock of raw-material was shown in the register by the appellant was not found in stock when physically verified - When the department checked the stock and found that 35.525 MTs of raw-material was not available physically but was available in their RG23A Part-I register, the appellant is liable to reverse the credit or pay duty equivalent to this amount. Appeal allowed in part.
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