2007 (7) TMI 502

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.... perforated nickel screen. (b)     They cleared some of the consignments in July, 2002, October, 2002, December, 2002 and February, 2004 which were returned. (c)     When the goods were originally cleared a duty amount of Rs. 36,928/- was paid which was taken as credit when the goods were returned. (d)    The goods could not repaired/reconditioned for reuse as perforated nickel screen and the same were sold as scrap in April 2004 and March, 2005. (e)     When the scrap arising out of the returned goods were cleared an amount of Rs. 2,461/- was paid as duty applicable on the scrap under Chapter 7204. (f)      The original author....

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.... reversed. Inasmuch as they have undertaken certain activities on the returned goods the same should be treated as amounting to manufacture and the provision of second part of Rule 16(2) which holds that duty shall be paid at the applicable rates and value shall be applicable. In their case the duty is payable as applicable to the scrap falling under Chapter 7204 which has been paid. (c)     This is a case involving interpretation and the question of imposition of penalty under Section 11AC does not arise. (d)    He also relies on the decision of the Tribunal in the case of C.C.E., Mumbai v. Tata SSL reported in 2005 (191) E.L.T. 799 and the decision in the case of Sundaram Industries Ltd. reported i....

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....envat Credit scheme, duty paid on inputs, capital goods or tax paid on input services are made available to avoid cascading effect of duties. It is expected that the value of finished product is more than the value of raw materials because of inherent value addition in manufacture and normally, the credit available at input stage is lesser than the duty payable on the final product except in stray cases of unintended aberration. In this case, what has been received by the appellant is definitely not san input or capital goods. It is by a deemed fiction created under Rule 16 of the Central Excise Rules, the returned goods have been given the status of input. But for Rule 16 of the Central Excise Rules, 2002 the question of granting any credi....