UNIGRAIN LEATHER PVT. LTD. Vs. C.C.E.

JUDGEMENT

(1.) THE applicant challenges the order of the Commissioner (Appeals) upholding the order -in -original by which a demand of Rs. 3,09,783/ - was confirmed under Rule 12 of Cenvat Credit Rules, 2002 read with Section 11A of the Central Excise Act 1944 with the direction to adjust Rs. 13,347/ -, which was the amount lying in the Cenvat Account on 31.3.2004, and imposing penalty of Rs. 25,000/ - under Rule 13 of Cenvat Credit Rules.

(2.) DURING the scrutiny of ER -3 Return for the quarter ending 30th June, 2004 filed by the appellant, it was observed that the appellant had opted to work under Notification No. 8/2003 -CE dated 1.3.2003 after filing the requisite option. However, the cenvat credit on the inputs lying as such, contained in the work in process (semi -finished) and in the final products, and in lying in stock as on 31.3.2004 was not reversed. The appellant was, therefore, called upon to deposit the cenvat amount, which was required to be reversed by letter dated 30.12.2004. On failure to do so, the show cause notice was issued.

(3.) THE authorities below, on the basis of the material on record, found that the appellant had opted for value based exemption under Notification No. 8/2003 dated 1.3.2003 but did not reverse the cenvat credit in terms of provisions of Rule 9(2) of the Cenvat Credit Rules.