TMI Blog2017 (3) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... evealed I am able to conclude that there is no iota of evidence to establish any suppression of facts or willful-misstatement on the part of appellant since the department has no case that the inputs cleared are fit for use by appellant for manufacture of finished goods - penalty imposed is unwarranted - appeal allowed - decided in favor of appellant - E/77/2012 - A/30108/2017 - Dated:- 24-1-2017 - Ms. Sulekha Beevi, C.S., Member (Judicial) Shri. Y. Sreenivasa Reddy, Advocate for the Appellant. Shri. P.S. Reddy, Assistant Commissioner (AR) for the Respondent. ORDER The appellants have filed appeal against the penalty which was imposed on the allegation that they removed the inputs as such, and failed to reverse the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to storage and wheather conditions and became unfit for use in manufacture of finished goods. Therefore, these solvents were cleared as spent solvents as demanded by the customers and Central Excise duty was paid on the transaction value. Subsequently, on being pointed out by the department, the appellants paid the differential duty, which is actual payable on the inputs/equal to the credit availed by them as per the invoices. He submitted that the solvents had become not fit for use in the manufacture of finished goods and therefore these were cleared as spent solvents. That the same cannot be considered as clearances of inputs as such, envisaged in Rule, 3 (5) of CENVAT Credit Rule, 2004. The appellants having paid the duty involved e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at some stage of manufacture and therefore they were removed as scrap. That the facts being different the law laid therein is not applicable. 5. I have considered the submissions made before me. The allegation is that appellants removed inputs/solvents as such and did not reverse the credit: Though it is alleged by the department that the solvents were removed as such, there is no evidence to show that these solvents were fit for use in the manufacture of final products. It is the case of the appellant that the solvents had deteriorated in quality and were not usable solvents and therefore they had cleared them as spent solvents. That spent solvents do not attract any duty at all. Even then, the appellants have paid duty on the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f manufacture through pipes and there is no stage of issuance, as in the case of other inputs. In any case, the appellant cannot be expected to put the unfit solvent into the process of manufacture and then decide to clear them, as spoiled solvents. In both these judgments the demand was set aside for the reason that inputs have become not usable for manufacture and therefore when removed it was held that credit need not be reversed, since there is no legal requirement to reverse credit in such situations. According to appellant the solvents became unfit for being used in the manufacture of final products. There is no evidence to contravert this. 7. The appellant, however, in the present case, does not challenge the duty demand or the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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