COMMISSIONER OF C. EX. Vs. FAIRDEAL RESEARCH LABORATORIES

JUDGEMENT

(1.) THIS appeal is directed against the Order -in -Appeal dated 3 -3 -2004 which allowed the appeal of the respondents. The relevant facts arise for consideration are that the respondents are engaged in the manufacture of P and P Medicines and were availing Cenvat credit in respect of inputs used relation thereto. The respondents opted for exemption of the finished goods from 1 -4 -2002. As per provisions of Rule 9(2) of Cenvat Credit Rules, 2002, the appellants were required to reverse the amount of credit involved in the balance stock of inputs lying as on date and in respect of inputs lying in finished goods. The appellants/respondents did not do so. A SCN was issued for seeking reversal of such credit from the respondents. On adjudication, the adjudicating authority confirmed the demand and also imposed penalty on the respondents. On an appeal by the respondents, The Commissioner (Appeals) upheld the confirmation of the duty but set aside the penalty imposed on the respondents and the interest on the amount confirmed. Hence this appeal by the revenue.

(2.) NONE appear for the respondents, but there is a request to decide the ease based on the cross objections.

(3.) HEARD Id. DR and perused the records. I find that the Id. Appellate Authority has set aside the penalty and interest imposed on the appellant based on the finding that Rule 12 of the Cenvat Credit Rules is applicable in this case. In order to appreciate the correct position, the said Rule 12 of Cenvat Credit Rules is reproduced :