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of <h1>Appellant's CENVAT credit claim on MS wire altered before clearance allowed under Central Excise rules</h1> <h3>K.R. Bedmutha, Shriram Wire Pvt Ltd Versus Commissioner of Central Excise</h3> K.R. Bedmutha, Shriram Wire Pvt Ltd Versus Commissioner of Central Excise - 2017 (352) E.L.T. 378 (Tri. - Mumbai) Issues:1. Availment of CENVAT credit on MS wire for altering gauge before clearance.2. Duty demand under CENVAT Credit Rules, 2002.3. Denial of CENVAT credit and imposition of penalties.4. Interpretation of exempt goods under CENVAT Credit Rules.5. Applicability of excisable goods in the definition of exempt goods.6. Scheme of CENVAT credit and burden of duty.7. Facility of payment of tax on exempted goods.8. Allegation of suppression of facts to evade duty.9. Limitation under section 11A of Central Excise Act, 1944.Analysis:1. The case involves the appellant-assessee availing CENVAT credit on MS wire for altering gauge before clearance, leading to duty demand under CENVAT Credit Rules, 2002. The appellant maintained separate accounts initially but faced logistical issues, resulting in the obligation to discharge duty liability on exempt goods at 8%. The dispute centered around the classification of goods and the applicability of duties of Central Excise.2. The appellant contended that their re-drawn MS wires were not non-excisable goods and that denial of CENVAT credit was contrary to the Rules and judicial decisions. The argument also highlighted the classification of wire rods as wires under the Rules, emphasizing the changes brought about by the CENVAT Credit Rules, 2004.3. The Tribunal analyzed the definition of exempt goods under the CENVAT Credit Rules, particularly focusing on the inclusion of excisable goods in the definition. The judgment clarified that exempt goods encompass those exempt from excise duty, emphasizing the legislative intent behind the Rules and the evolution of the qualifying expression 'excisable' in subsequent amendments.4. The judgment delved into the scheme of CENVAT credit, emphasizing the burden of duty on the ultimate consumer and the purpose of the facility of payment of tax on exempted goods. It highlighted the importance of preventing the re-entry of duty-paid goods into the value chain to ensure the recovery of legislated duties.5. The Tribunal addressed the appellant's argument regarding the alleged suppression of facts to evade duty, emphasizing the requirement for a finding on deliberate suppression by the authorities. The judgment concluded that the recovery was barred by limitation under section 11A of the Central Excise Act, 1944 due to the lack of a finding on deliberate suppression, leading to the setting aside of the impugned order.6. Ultimately, the appeals were allowed, and the judgment was pronounced in court on 19/12/2016, providing a comprehensive analysis of the issues surrounding the availment of CENVAT credit, duty demands, denial of credit, interpretation of exempt goods, and the limitation under the Central Excise Act, 1944.
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