Tribunal Grants Duty Credit for Remaking Glass: Appellants' Appeal Allowed

The Tribunal allowed the appellants to take credit for duty paid on damaged glass received back, relying on Rule 16 of the Central Excise (No. 2) Rules, 2001, and the precedent in Triveni Sheet Glass Works Ltd. v. CCE - 1992. The Tribunal held that the appellants were entitled to duty credit as the process of re-melting damaged glass and making new sheet glass constituted 'remaking.' The impugned order was set aside, and the appeal was allowed in favor of the appellants, granting them consequential benefits.

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Issues:
Whether the appellants are allowed to take credit in respect of duty paid on glass received back in damaged condition.

Analysis:
The appellants cleared tinted and non-tinted glass on payment of duty in about 9000 trucks annually. In some instances (50-60 trucks), the glass gets damaged and is returned to the factory. The dispute revolves around whether the appellants can claim credit for duty paid on such damaged glass. The appellants relied on Rule 16 of the Central Excise (No. 2) Rules, 2001, which allows for CENVAT credit on goods returned to the factory for re-making, re-conditioning, or other reasons. The rule specifies that if the process on the goods before returning does not amount to manufacture, the manufacturer must pay back the CENVAT credit taken. The appellants also referenced a previous Tribunal decision in Triveni Sheet Glass Works Ltd. v. CCE - 1992, where it was held that the process of re-melting damaged glass and making new sheet glass falls under the term 'remaking.'

After reviewing the submissions, case records, and the precedent set by the Tribunal in Triveni Sheet Glass case, the Tribunal held that the appellants are indeed entitled to duty credit on damaged glass received back by them. The Tribunal emphasized that the term 're-made' in Rule 16 supports this interpretation. Consequently, the impugned order was set aside, and the appeal was allowed, granting consequential benefit to the appellants. The final order was pronounced in open court on 23-12-2005.

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