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2016 (4) TMI 446 - CESTAT CHENNAI

2016 (4) TMI 446 - CESTAT CHENNAI - 2016 (343) E.L.T. 922 (Tri. - Chennai) - Demand of duty and imposition of penalty - Inputs supplied to the job worker and those procured on their own account for manufacture have been inter utilised whenever required - Held that:- inputs meant for manufacture on job work cannot be utilised for manufacture on their own account and vice versa. Such removal according to revenue would be construed as diversion of inputs or removal outside the factory for home cons .....

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so long as inputs are not used for manufacture of exempted goods. Within the factory, for manufacture, the inputs can be utilised irrespective for whom the goods are manufactured. Removal within factory is not removal for home consumption from factory which alone invites reversal of credit or payment of duty. - Therefore, the impugned order is set aside and also demand and penalty is set aside. - Decided in favour of appellant with consequential relief - E/1032/2005 - Final Order No. 40591 .....

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M/s Bayer Industries Ltd (called M/s BIL). M/s BIL supplied inputs for desmopan for job work manufacture by the appellants. Obviously, the inputs are common for manufacture on appellants own account and for manufacture by them on job work. The inputs are stocked together and usually the Appellant uses the materials supplied by BIL for manufacturing the goods on job work basis for Bil while for. manufacturing goods on its own behalf it uses its own inputs which are received in packages marked BS .....

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y taken from the BIL stock, At this stage it does not avail any credit on the inputs received.The revenue issued notice to the appellants for alleged diversion of such inputs without following the procedure under erstwhile rule 57AC or 57F (3) and without payment of duty or paying an amount equal to credit taken on such diverted inputs. Penalty was also sought to be imposed under erstwhile Rule 173Q. After the order of adjudication passed by the Additional Commissioner confirming the demand prop .....

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account and on job work basis and whether the inputs in question are common ? (2) whether use of such common inputs is prohibited under the erstwhile Rules ? (3) whether invoking of extended period of time limit and imposition of penalty justified ? 4. Heard both sides. 5. The appellant was represented by Mrs. L. Mythili, Advocate, and the respondent was represented by Ms. Indira Sisupal, AC, (AR). The main reason for confirmation of demand by lower authorities is that the inputs supplied to th .....

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