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2023 (6) TMI 1 - AT - Central ExciseClandestine Removal - additional consideration has flown from the appellant to their customer or not - Processing loss - rule 4(5) of the CENVAT Credit Rules, 2004 - HELD THAT:- The entire case of clandestine clearance has been made against the appellant in respect of the goods cleared by the appellant on the proper documents as per rule 4(5) of the CENVAT Credit Rules, 2004 or duty paying documents without establishing flow of any additional consideration. In the present case it appears the additional consideration has flown from the appellant to their customer in form the material used by the job worker to compensate for the processing loss. In case of STERLITE INDUSTRIES (I) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [2004 (12) TMI 108 - CESTAT, MUMBAI], a larger bench of tribunal has held that Modvat credit of duty paid on the inputs used in the manufacture of final product cleared without payment of duty for further utilisation in the manufacture of final product, which are cleared on payment of duty by the principal manufacturer, would not be hit by provision of Rule 57C. In case of WELSPUN INDIA LTD. VERSUS COMMISSIONER OF C. EX., DAMAN [2009 (2) TMI 690 - CESTAT, AHMEDABAD] where the issue was held in favour of assessee. Circular No 54/88-CX dated 01.10.1988 relied in the impugned order, was in context of the rule 173H/173L of the erstwhile Central excise Rules, 1944 and has no application to the facts of the present case. Even if it is to be held that appellant was clearing his finished goods in the garb of job worked goods without payment of duty then also the case of revenue will fail in absence of any additional consideration received by the appellant against such clearances. Demand do not sustain - As the demand for duty cannot be upheld, so the demand for interest and penalties imposed cannot be sustained - appeal allowed.
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