1. In this appeal filed by the assessee, the short question is whether under section 11AC of the Central Excise Act .they were liable to be penalized on the facts of this case. The facts are that the appellant had removed a Horizontal Cold Chamber Pressure Die Casting Machine (which had been purchased on 04/12/2006 and on which CENVAT credit had been taken) to another unit of theirs on 04/06/2008 without reversing the credit, that this fact was not disclosed to the department until the officers thereof visited the factory and detected the fact on 27/09/2008, that eventually the appellant paid the credit amount of Rs. 81,600/- on 24/10/2008, that they also paid interest thereon amounting to Rs. 3,953/- in terms of section 11AB of the Central Excise Act on the same date, that in a statement dt. 17/02/2009, the Managing Partner of the appellant-firm admitted that the machine had been shifted to their second unit for carrying out certain casting on ingots as they did not have the sufficient space to install the machine in their unit, that it was also admitted that they had availed CENVAT credit on the machine at the time of its purchase but had not informed the department about its shifting to the second unit, that it was also pointed out that the CENVAT credit had since been reversed and the applicable interest paid at the instance of the department, that a show-cause notice dt 22/09/2009 was issued to the appellant, inter alia, for demand of the aforesaid amount of Rs.81,600/- and for appropriation of payment thereof as also for appropriation of the payment of interest thereon and also for imposition of penalty on the appellant under section 11 AC of the Central Excise Act read with Rule 15(2) of the CENVAT Credit Rules, 2004, that this show-cause notice invoked the extended period of limitation under proviso to Section 11A(1) of the Act on the ground of suppression of facts with intent to avail undue benefit under the CENVAT Credit Rules, that in a reply to the show-cause notice the party, inter alia, contested the penal proposal on certain grounds, that the adjudicating authority, inter alia, imposed penalty equal to duty on the assessee under Section 11AC of the Act read with Rule 15 of the CENVAT Credit Rules, 2004, that this penalty was contested by the party in an appeal preferred to the Commissioner(Appeals) on certain grounds based on Rule 4(5)(a) of the CENVAT Credit Rules, 2004 and that this challenge did not succeed with the result that the penalty came to be sustained by the Commissioner(Appeals).

2. The learned consultant for the appellant submits that the relevant proposal in the show-cause notice was based on Rule 3(5) of the CENVAT Credit Rules, 2004 and that the provision actually applicable to this case is Rule 4(5)(a). It is submitted that the machine in question was transferred to another unit of the appellant to be used by that unit as job worker for casting certain machines for the appellant. The capital goods so transferred to the other unit was intended to be returned to the appellant after the job work. On these facts, Rule 4(5)(a) was applicable. Had the appellant reversed the CENVAT credit on the capital goods at the time of its transfer to other unit, they would have been entitled to take recredit of the same amount on receipt of the capital goods back from the job worker unit. On these facts, it is argued that there was a revenue-neutral situation wherein there was no warrant to impose any penalty under Section 11 AC of the Act. In this connection, the learned consultant has relied on the following decisions:-

 1.  OHM Industries v. CCE [Final Order No. 746 of 2010, dated 26-3-2010]

 2.  Zenith Machine Tools (P.) Ltd. v. CCE [2010] 28 STT 298 (Bang.-Cestat)

 3.  Pooja Forge Ltd. v. CCE 2006(196) ELT 18(Tri.-Delhi)]

It is further pointed out that an appeal filed by the department against the Tribunal's decision in the case of Pooja Forge Ltd. (supra) was dismissed by the Hon'ble High Court of Punja