TMI Blog2017 (3) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... llant. Imposition of penalty u/s 11AC - rejected inputs - Held that: - on the issue of admissibility of credit on the rejected inputs the issue is debatable - penalty u/s 11AC is not imposable. Returned goods - Rule 16 - demand on the ground that returned duty paid goods were not re-issued within six months - Held that: - the period of six months was not provided under Rule whereas it is provided by way of trade notice which is procedural one. Under any circumstances duty paid goods cannot be levied duty twice only because it is not cleared within six months from the factory of the appellant - demand set aside. Personal penalty imposed on the employees of the appellant - Held that: - all the issues involved are debatable - it is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sagar Kulkarni, Ld. Advocate submits that as regards the alleged shortage of inputs material after stock taking by the departmental officers, the appellant had given reconciliation of the stock. According to which there was a minor shortage and the shortages observed by the departmental officers was not correct. However, the said reconciliation was not considered by the adjudicating authority. He submits that before the adjudication, the appellant had approached the Settlement Commission where the Commissioner (investigation) has given his report of reconciliation, which was not accepted by the Settlement Commission and therefore, the application has rejected and the matter came back to the adjudicating authority for adjudication. He submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rong mention of Rule. But it is correctly covered under Rule 16 of the Central Excise Rules, 2002. According to said Rule also no duty can be demanded on the duty paid goods returned and lying in the factory. He place reliance on the following decisions: a) SPACO Carburettors (India) Ltd. 2002 (148) ELT 755 (Tri-Mum) b) Jyothi Ltd. 2007 (219) ELT 472 (Tri-Mum) 4. We have carefully considered the submissions made by both sides. 4.1 As regards the duty demand of shortage of inputs it is undisputed that the appellant has submitted reconciliation statement to the adjudicating authority. The adjudicating authority as well as the Commissioner (Appeals) decided the matter only on the observations of the Settlement Commission. Where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty under Section 11AC is not imposable. We, therefore, set aside the penalty imposed under Section 11AC. 4.3 As regards the duty demand of ₹ 2,36,608/- on the returned goods, we find that the only reason for confirmation of demand is that returned duty paid goods were not re-issued within six months. In our considered view, the period of six months was not provided under Rule whereas it is provided by way of trade notice which is procedural one. Under any circumstances duty paid goods cannot be levied duty twice only because it is not cleared within six months from the factory of the appellant. Judgements cited by the appellant clearly supports their case. Therefore, the duty was wrongly demanded on the returned duty paid goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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