2007 (5) TMI 519

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....ppellant. Shri K. Sambi Reddy, JDR, for the Respondent. [Order per : T.K. Jayaraman, Member (T)]. -  This appeal has been filed against the Order-in-Appeal No. 216/2006-C.E., dated 13-7-2006, passed by the Commissioner of Central Excise (Appeals), Mangalore. 2. The appellants availed Cenvat credits in respect of rejected goods received back for repair and rectification from M....

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....returned to the factory. (1) Where any goods on which duty has been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take Cenvat credit of the duty paid as if such goods are received as inputs under the Cenvat Credit Rule....

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....specified by the Commissioner." When the appellants received back the rejected goods, they took CENVAT credit under Rule 16(1). There is nothing wrong in this and this has been allowed by the lower authorities. However when the rejected goods are cleared as scrap, Rule 16(2) comes into play. When the rejected goods are cleared as scrap, then the process to which the rejected goods are subjected....