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TMI Blog2019 (1) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... edit on various inputs and capital goods received in the factory and used in relation to the manufacture of final products. In some cases, they have to remove small quantities of such inputs from within the factory for the purposes other than manufacture of final products. Such removal being of very small quantities, is not identifiable at the time of availment of CENVAT Credit. When these inputs are used for other purposes, the appellant has been reversing the CENVAT Credit of an amount equivalent to the credit availed on such inputs. During the period January 2008 to April 2011, they had reversed an amount of Rs. 56,99,304/- being the CENVAT Credit taken on inputs removed and used for the purposes other than use in manufacture. A show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit which was availed but subsequently reversed by the appellant. Hence this appeal. 2. Ld. Counsel for the appellant submits that no penalty can be imposed upon them as the CENVAT Credit availed by them has been reversed prior to its utilisation. He relies on the following case laws in support of his contention to this effect. (a) CCE Vs. Bharat Dynamics Ltd. [2016(331)ELT 182 (A.P.) (b) CCE Vs. Strategic Engineering Pvt. Ltd. [2014(310) ELT 509 (Mad.)] (c) CCE Bangalore vs. Bill Forge Pvt. Ltd. [2012(279)ELT 209 (Kar.)] (d) B. Girijapathi Reddy & Co. vs. CCE, Guntur [2016(344)ELT 923 (Tri.- Hyd.)] (e) RINL vs. CCE, Visakhapatnam I Final Order No. A/30494/2018, dated 24.04.2018. 3. Ld. Counsel also submits that the demand is hit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollows: "Rule 14 specifically provides that where the CENVAT Credit has been taken or utilised wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word "OR" appearing in Rule 14, twice, could be read as "AND" by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole, we find no reason to read the word "OR" in between the expressions 'taken' or 'utilized wrongly' or has been erroneously refunded as the word "AND". On the happening of any of the three aforesaid circumstances such credit becomes recoverable along with interest." 5. It is his submission t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e if they are availed CENVAT Credit on some inputs on which they could not have availed CENVAT credit at all. Such case would have been squarely covered under Rule 14 and Rule 15. We have also considered the argument of the Revenue that inputs are used for the purposes other than manufacture, without maintaining separate accounts for such inputs but after reversing, a proportionate amount of CENVAT Credit availed on them and this cannot be considered as removal of inputs as such. Rule 3(5) of CCR 2004 reads as follows: "(5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count, then the manufacturer or service provider, as the case may be, shall pay an amount equivalent to the CENVAT credit taken in respect of the said input or capital goods: Provided that if the said input or capital goods is subsequently used in the manufacture of final products or the provision of taxable services, the manufacturer or output service provider, as the case may be, shall be entitled to take the credit of the amount equivalent to the CENVAT credit paid earlier subject to the other provisions of these rules. (5C) Where on any goods manufactured or produced by an assessee, the payment of duty is ordered to be remitted under rule 21 of the Central Excise Rules, 2002, the CENVAT credit taken on the inputs used in the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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