ISMT LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellant has challenged the order of the Commissioner (Appeals) imposing penalty under Section 11AC and demanding of interest under Section 11AB, which were dropped by the original adjudicating authority.

(2.) THE brief facts of the case are that the appellants purchased a input i.e. Steel Rounds from M/s ISSL and sent the same directly to job worker M/s Sodhi Engineering for grinding and cutting. As per the agreements with the supplier i.e. M/s ISSL, the supplier has to bear the cost of cutting and grindings losses occurred at job worker's premises. Accordingly, the appellant raised debit notes to M/s ISSL for short quantity of inputs received. As per provisions of the Central Excise Act, 1944, the appellant required to reverse the proportionate Cenvat Credit in respect short receipt of inputs for which the appellant issued debit notes. On pointing out by the department, the appellant reversed the Cenvat Credit for receipt of short quantity of inputs due to loss in the cutting and grinding of the inputs at job worker's end. The period involved is May, 2003 to March, 2004. The show -cause notice was issued on 14.9.2004 under Section 11DD to pay the interest on delayed payments and for imposing a penalty under Section 11AC of the Central Excise Act, 1944.

(3.) HOWEVER , on an appeal before the Commissioner (Appeals) by the Revenue, the said order was set aside holding that the interest is payable by the assessee under Section 11AB and also confirmed the penalty under Section 11AC on the appellant. Aggrieved from the same the appellant is before me.