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2016 (9) TMI 38 - CESTAT BANGALORE

2016 (9) TMI 38 - CESTAT BANGALORE - TMI - Recovery of Cenvat credit and interest - irregularly taken on inputs which resulted in double benefit to the appellant - appellant submitted that removal of inputs under Rule 4(5)(a) for processing and return cannot be construed as removal of inputs as such under Rule 3(5) - Held that:- after considering the provisions of Rule 3(5) and 4(5)(a) of the Cenvat Credit Rules 2004 and the judgments of the Tribunal in the case of Southern Lubrication (P) Ltd. .....

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ef - E/2956/2012, E/25336/2013, E/25338/2013-SM - Final Order Nos. 20679 - 20681/ 2016 - Dated:- 30-8-2016 - Shri S. S. Garg, Judicial Member Shri B.N. Gururaj, Advocate For the Appellant Dr. K. Ezhilmathi, AR For the Respondent ORDER Per S. S. Garg The present three appeals are directed against the impugned orders dated 08.10.2012, 20.12.2012 and 18.01.2012 vide which the Commissioner has upheld the Orders-in-Original and rejected the appeals of the appellant. In all the three appeals, though t .....

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alty For the sake of convenience, facts of the case are taken from E/2956/2012. Briefly the facts of the present case are that the appellant is a partnership firm and is engaged in the manufacture of packing articles such as wooden boxes and plywood pallets falling under Central Excise Tariff sub-heading No. 4415 20 00 of the First schedule of Central Excise Tariff Act and are availing the benefit of cenvat credit on inputs, capital goods and input services. The appellants also get the goods man .....

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he same. But the departmental auditors who audited the appellant s records on 26.05.2010 objected on the ground that the entire credit on the inputs should have been reversed under Rule 3(5) and the credits taken have resulted in double benefit to the appellant. Thereafter show-cause notices were issued which culminated into the recovery of cenvat credit irregularly taken on inputs and interest under Rule 14 of the Cenvat Credit Rules 2004 and imposed a penalty under Rule 15(2) of the Cenvat Cre .....

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Court and the Tribunals and are not sustainable in law. He further submitted that removal of inputs under Rule 4(5)(a) for processing and return cannot be construed as removal of inputs as such under Rule 3(5). He further submitted that the appellant s goods fall under Rule 4(5)(a) of Cenvat Credit Rules 2004 which do not prescribe for maintaining any records except a simple account showing the dispatch and return of the goods from the job worker. He further submitted that there is a difference .....

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nvat Credit Rules 2004 are applicable and not Rule 3(5). In support of his submission, he relied upon the following case-laws: a) International Auto Ltd. Vs. CCE, Bihar 2005 (183) E.L.T. 239 (S.C) b) Southern Lubrication (P) Ltd. Vs. CCE, Bangalore 2012-TIOL-642-CESTAT-BANG. 4. On the other hand the learned AR reiterated the findings of the impugned order. Here it is pertinent to mention the bare provisions of Rule 3(5) and Rule 4(5)(a) of Cenvat Credit Rules 2004. Rule 3(5) when inputs or capit .....

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removed outside the premises of the provider of output service for providing the output service Rule 4(5)(a) The Cenvat credit shall be allowed even if any inputs or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repair, re-conditioning 2[or for the manufacture of intermediate goods necessary for the manufacture of final products] or any other purpose, and it is established from the records, challans or memos or any other docume .....

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