TaxTMI 
TaxTMI 
2010 (2) TMI 846
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.... had cleared several consignments of tubes on stock-transfer basis to a tyre manufacturing unit, but some of these consignments were returned to the appellant (Pune unit) for what is called as 'logistical reason'. CENVAT credit of the duty paid by the appellant on the original clearances was taken by them upon receipt of the goods returned by the tyre unit. In the D-3 intimation given to the department, the appellant furnished particulars of the goods received back from the tyre manufacturing unit and also stated the purpose as 'storage'. The returned tubes, on which CENVAT credit was taken, were subsequently cleared to other tyre manufacturing unit of the same company on payment of duty under Section 4 of the Central Excise Act. These seco....
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....been raised under the proviso to Section 11A(1) of the Act, is in terms of sub-rule (2) of Rule 16 of the Central Excise Rules, 2002. The goods returned by the original consignee were admittedly received by the appellant (Pune unit) under sub-rule (1) of Rule 16. These sub-rules read as follows : "Rule 16 :- (1) Where any goods on which duty had 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 Rules, 2002 and utilize this credit according to the said rules. ....
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....ve paid duty equal to the CENVAT credit taken on the goods returned by the first consignee. In other words, the CENVAT credit so taken should have been reversed. 3. Learned counsel has also contested the demand of duty on the ground of limitation by submitting that there is no evidence of intent to evade payment of duty in this case. Even if it be assumed that the appellant contravened the provisions of Rule 16(2), the extended period of limitation could not have been invoked against them in the absence of intent to evade payment of duty. It has been submitted that a company of the appellant's stature cannot be expected to evade payment of duty of Rs. 55,000/-. Any duty paid on the second clearances would have been available as CENV....
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.... 16(2). The Tribunal held that, if the process to which the goods returned by the original consignee were subjected to did not amount to 'manufacture', the amount of credit availed under sub-rule (1) of Rule 16 had to be reversed under sub-rule (2). In the instant case, the tubes returned by the original consignee were removed as such without any process whatsoever. Even the show-cause notice admits these facts. The question is whether the second clearances of the goods would be covered by the first part of sub-rule (2) of Rule 16 as canvassed by the Revenue or by the second part of the sub-rule as contended by the assessee. In this context, it is pertinent to note that the goods returned by the original assignee were admittedly received by....
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....nder Section 4 of the Act. The expression 'in any other case' found in the second part of sub-rule (2) is significant. In my view, a case in which the manufacturer of final product receives the goods back from the customer under sub-rule (1) and removes the same as such without undertaking any process thereon is also covered by the second part of sub-rule (2). The expression 'any other case' is apparently wide enough to cover such a case. In the D-3 intimation given by the appellant to the department, the purpose of bringing the returned duty-paid goods back into their factory was shown as 'storage'. The appellant did not mention any 'process' in the D-3 intimation. In their reply to the show-cause notice also, they did not claim that the g....