TMI Blog2010 (11) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act and Rule 25 of the Rules would not arise - The appeal is accordingly dismissed - 1130 of 2009 - - - Dated:- 25-11-2010 - Harsha Devani and H.B. Antani, JJ. REPRESENTED BY : Ms. Sejal K. Mandavia, Standing Counsel, for the Appellant. None, for the Respondent. [Order per : Harsha Devani, J. (Oral)]. - In this appeal under Section 35G of the Central Excise Act, 1944 (the Act), the appellant-revenue has challenged order dated 31st March, 2009 [2009 (241) E.L.T. 279 (Tribunal)] passed by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal) proposing the following two questions : (1) In view of the facts and circumstances said above, whether the Hon ble CESTAT is justified in imposing penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A show-cause notice dated 2nd August, 2007 came to be issued to the respondent seeking to recover CENVAT credit to the tune of Rs. 2,79,969/- under Section 11A(1) of the Act and also proposing interest and penalty under Sections 11AB and 11AC of the Act in respect of the said clearances. The show-cause notice came to be adjudicated vide order dated 11th March, 2008 confirming the duty, penalty and interest. The assessee carried the matter in appeal before the Commissioner (Appeals) who set aside the order made by the adjudicating authority and allowed the appeal. The Commissioner (Appeals) found that the assessee had purchased M.S. Drums from manufacturers of drums and had availed CENVAT credit on the duty paid on such drums. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty was required to be imposed in terms of provisions of Rule 27 of the Central Excise Rules, 2002 (the Rules) which provides for maximum penalty of Rs. 5,000/- and ordered accordingly. 4. Assailing the impugned order passed by the Tribunal, Ms. Sejal Mandavia, learned Standing Counsel for the appellant invited attention to the order made by the adjudicating authority, to submit that the adjudicating authority has recorded a finding of fact to the effect that the assessee had availed of CENVAT credit on drums which had been cleared on payment of Central Excise duty without undertaking any process thereon and without bringing the same in its factory premises. M.S. Drums being finished goods cannot be treated as input and as such, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ximum penalty of Rs. 5,000/- and ordered accordingly. 6. From the facts noted hereinabove, it is apparent that the assessee had purchased the M.S. Drums from manufacturers. On the M.S. Drums so purchased by it the assessee had availed of CENVAT credit. The assessee sold the said M.S. Drums to purchasers without undertaking any manufacturing activity thereon. As such, the M.S. Drums not having been used as inputs for manufacture of final product, the assessee was not entitled to avail of CENVAT credit in respect thereof. However, as noted by both the Commissioner (Appeals) as well as the Tribunal, though the assessee had availed of CENVAT credit on the M.S. drums purchased by it, it had sold the same to buyers raising central excise invoic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vade payment of duty. Unless, the said basic ingredients are satisfied, the question of invoking either Section 11AC of the Act or Rule 25 of the Rules would not arise. In the circumstances, in the absence of any such finding having been recorded by the adjudicating authority, the question of imposing penalty under Section 11AC of the Act and Rule 25 of the Rules would not arise. 8. In the light of the aforesaid discussion, it is not possible to state that there is any infirmity in the impugned order of the Tribunal so as to warrant interference. No question of law, much less, a substantial question of law, can be stated to arise out of the impugned order of the Tribunal. The appeal is accordingly dismissed. - - TaxTMI - TMITax - Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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