CCE Vs. SUPER MUSIC INTERNATIONAL

JUDGEMENT

(1.) Facts of the case, in brief, are that the Respondents manufacture blank/unrecorded cassettes falling under Chapter heading 85.23 and recorded cassettes falling under heading 85.24 of the Central Excise Tariff. The Respondents are also availing Cenvat credit facility under Cenvat Credit Rules, 2002. One of the inputs used by them is art -paper and gum base paper, which are got converted into inlay cards and stickers/labels on job work basis for use in the manufacture of cassettes. Inlay cards as well as stickers are fully exempt from duty. The point of dispute is as to whether the Respondents are eligible for Cenvat credit of duty on the art paper and gum base paper. Revenue issued a show cause notice denying Cenvat credit amounting to Rs. 3,41,812/ - for the period from February 2003 to December 2003 invoking Rule 6 of the Cenvat Credit Rules. The Assistant Commissioner vide order -in -original dated 22/03/06 confirmed the Cenvat credit demand of Rs. 3,41,812/ - alongwith interest and besides this, imposed penalty of equal amount under Rule 13(2) of Cenvat Credit Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. The Commissioner (Appeals), however, vide the impugned order -in -appeal set aside the Assistant Commissioner's order. The present appeal has been filed by the Revenue against the order of Commissioner's orders.

(2.) Heard both the sides.