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2019 (5) TMI 1401 - AT - Central ExciseCENVAT Credit - input services or not? - repair activity on the imported machine - HELD THAT:- It is fact that appellant imported machine, brought in the factory, dismantled and reassembled the same. This does not amount to manufacture and the appellant has never given details of their activity and the process carried out by them. Dismantling of the machine and reassemble of machine does not amount to manufacture. In terms of Rule 16, the Cenvat credit is admissible on any goods brought in the factory for any reason including various processes subject to condition that if the activity does not amount to manufacture the appellant is required to pay duty equal to the Cenvat credit availed at the time of receipt - Only in case of manufacture the assessee is required to pay duty on the assessable value. In the present case, the activity does not amount to manufacture, the appellant is required to pay duty equivalent to the Cenvat credit availed. However, the appellant have discharged duty on transaction value therefore, the appellant is liable for payment of duty for the differential amount - The impugned order demanding entire Cenvat credit is not correct and legal - The demand of Cenvat credit should have been confined only for the differential amount. Penalty under Rule 15 of Cenvat Credit Rules read with Section 11AC of Central Excise Act, 1944 - HELD THAT:- Since the demand is reduced to differential amount, between the demand raised by the lower authority and the amount already paid by the appellant at the time of removal of the goods, the penalty under Section 11AC shall also stand reduced equal to the differential duty demand and not equal to the total demand confirmed - Since the duty demand is re-determined, therefore the appellant is also entitled for option to pay 25% of the penalty subject to condition if the differential duty, interest and 25% penalty is paid within one month from the date of this order. Appeal allowed in part.
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