PRIYADARSHINI POLYSACKS LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE assessee is in appeal against the impugned order for denying the Cenvat credit taken by them on the goods. The Revenue is also in appeal against the impugned order for dropping the penalty imposed on the assessee by the learned Commissioner. Brief facts of the case are that the assessees are manufacturer of excisable goods. During the course of investigation, it was found that some inputs were cleared by them on the basis of delivery challans and the some were not recorded in their books and the credit taken on these inputs was not reversed. Accordingly, a show cause notice was issued to deny the Cenvat credit. The assessees in their reply to the show cause notice stated that as there was shortage of space in their factory therefore, some inputs were temporarily stored in other premises outside the factory. The said inputs was received back in their factory and were used in the manufacture of their final product. The adjudicating authority denied the credit on the premise that at the time of removal of the inputs they were required to take permission as per Rule 6 of Central Excise Rules, 2002. As the assessees have not taken permission for removing the inputs therefore, the adjudicating authority confirmed the demand along with the interest and also imposed a mandatory penalty of equivalent amount under Section 11AC of the Central Excise Act, 1944. On appeal before the learned Commissioner (Appeals) the demand was confirmed, interest and penalty was waived. Against the impugned order, both the parties are in appeal.

(2.) THE learned Counsel appearing for the assessees submit that although they have not taken permission from the Superintendent of the Central Excise at the time of removal as per the Rule 6 of Central Excise Rules, 2002, but these inputs have been used later -on for the manufacture of their final product. He, therefore, prays that in the light of the judgment of Hon'ble High Court in the case of CCE v. Teletube Electronics Ltd. - : 2013 (292) E.L.T. 342 (All. HC) and the decision of this Tribunal in the case of Sanchita Polymers v. CCE -, 2009 (241) E.L.T. 240 (Tri. -Ahmd.) the impugned order quo confirming the demand of duty be set aside.

(3.) CONSIDERED the submissions made by both the sides. The fact that these inputs were later -on received back by the assessee in their factory and the same has been used for the manufacture of their final product is not in dispute. Therefore, in the light of the judgment in the case of Teletube Electronics Ltd. (supra) wherein the Hon'ble High Court of Allahabad held that if the goods on which duty has been paid were removed from the factory premises either for the shortage of space or that the goods were required to be polished, entitled to benefit of credit on re -entry. The learned A.R. has failed to produce any contrary decision to the above decision of the Hon'ble High Court of Allahabad. Therefore, I hold that as the goods have been received back in their factory, the assessees are entitled to take credit. The proceedings initiated against the assessee by way of show cause notice are dropped and the appeal is allowed with consequential relief, if any. The appeal filed by the Revenue is dismissed.