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M/s. Exide Industries Ltd. Versus Commissioner of Central Excise, Kolkata-III

2016 (4) TMI 373 - CESTAT KOLKATA

Reversal of Cenvat credit - Inputs found short in the factory premises of the appellant - Appellant contended that shortages found in the factory premises were written off as per Cost Accounting System so demand of duty cannot be made because the period of demand is 2002-03 to 2005-06 and the provisions for reversal of CENVAT Credit with respect to shortages in inputs and capital goods on writing off was introduced as per Notification No.26/2007-CE(NT) dated 11.05.2007 hence no CENVAT Credit is .....

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ellant. The same is extended to the appellant subject to the condition that the entire demand along with interest and 25% reduced penalty is paid within 1(one) month from the date of receipt of this Order. - Decided partly in favour of appellant - Appeal No.EA-730/11 - Order No.FO/A/75245/2016 - Dated:- 5-4-2016 - SHRI H.K.THAKUR, MEMBER(TECHNICAL) For the Petitioner : Miss S.Chatterjee, Advocate For the Respondent : Shri K.Chowdhury, Supdt.(AR) ORDER PER SHRI H.K.THAKUR. This Appeal has been fi .....

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also imposed equivalent penalty under Section 11AC of the Central Excise Act, 1944 along with interest. 2. Miss S.Chatterjee (Advocate) appearing on behalf of the Appellant argued that CENVAT Credit has been denied to the Appellant with respect to inputs found short in the Appellant s stock as per Statutory Audit undertaken by the Appellant. It is the case of the Appellant that the said shortages were written off and accordingly no demand of duty can be made because the period of demand is 2002 .....

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015 (330) ELT 657(Tri.-Bang.)] (ii) Philips Electronics India Ltd. v. Commissioner of C.Ex, Pune- [2011 (274) ELT 311(Tri.-Bang.)] (iii) Commissioner of C.Ex., Navi Mumbai v. Hindalco Industries Ltd.- [2011 (272) ELT 161 (Bom.)] (iv) Commr. of Central Excise v. Indian Petrochemicals Corpn. Ltd.- [2008 (226) ELT 339 (Bom.)] (v) Ray Ban Sun Optics India Ltd. v. Commr. of Central Excise, Jaipur-[2012 (283) ELT 276 (Tri.-Del.)] (vi) Commissioner of Central Excise Pune-III v. Bharat Forge Ltd.- [2015 .....

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hich Show Cause Notice had been issued, were lying anywhere in the factory as unfit inputs etc..That all the case laws relied upon by the Advocate are for situations where the inputs were available in the factory, but were not usable. The ld.AR relied upon the case law of ASCO (India) Ltd. v. CEGAT, Chennai [2009 (238) ELT 397(Mad.)]. It was his case that in this case Hon ble Madras High Court has held that when there are shortages then CENVAT Credit is required to be reversed. 5. The Ld.Advocat .....

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factory premises were written off by the Appellant as per Cost Accounting System and no CENVAT Credit is required to be reversed. The Ld.Advocate appearing on behalf of the Appellant relied upon the amendment carried out under Notification No.26/2007-CE(NT) dated 11.05.2007 which only made reversal of CENVAT Credit where inputs are written off. It is thus the case of the Appellant that since the period of the demand is prior to 11.05.2007, therefore, no reversal of CENVAT Credit on written off .....

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le force in the arguments and submissions of the counsel. Prior to amendment of Rule 5B of the Cenvat Credit Rules on 11.05.2007, there was no provision requiring reversal of the credit when the inputs were partially or fully written off but no removal. In view of the precedent decision, cited by learned counsel and also other submissions which were made, we find that this demand is not sustainable and accordingly, is set aside. 8. It is observed that there was no removal of inputs in the case b .....

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