2014 (12) TMI 119

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....red by them on payment of duty to their customers is sometimes received by them either under the cover of the invoices issued by their customer or under the cover of the invoices issued by the respondent themselves. In terms of the provisions of Rule 16 of the Central Excise Rules, the respondent was entering goods in their input receipt register and was availing the Cenvat Credit in Credit Account Register. There is no dispute about the availment of credit by the Respondents. 3. However, the Revenue was of the view that is inasmuch as after entering the goods in their Cenvat Account, the assessee has simplicitor shown the issuance of the said inputs for further manufacture, without maintaining any records about the same. Statements of t....

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....as prescribed. The adjudicating authority has alleged that the reprocesses like rewinding cutting, slitting, re-packing undertaken by the appellant on the returned goods do not amount to 'manufacture' as defined under Section 2(f) of the Central Excise Act 1944 and the appellant should not pay duty less than the credit availed by them on such goods in terms rule (2) of Rule 16 ibid. I find that the goods were returned because of not meeting their purchase specifications and process incidental/ancillary to rendering of the goods as marketable would qualify the application of manufacture and consequent levy thereafter, as defined under law. As regards differential demand on 80% of sales returns cleared as scrap is not sustainable because same....