AI Drafter 
TaxTMI 
TaxTMI 
2015 (9) TMI 679
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.... Ltd. Vs. CCE New Delhi-2004 (165) ELT 129 (SC) held that such lamination and metalizing of the film would not amount to manufacture. As consequent to such decision, the Adjudicating Authority held that duty already paid on laminated film and metalized film was not duty as no duty was payable. Appellant collected a sum of Rs. 8,45,11,283/- from the customer and that should be deposited in terms of Section 11D of the Central Excise Act 1944. Equivalent amount of penalty was also imposed on that account. It was also held that since metalized laminated films are not dutiable, therefore, credit taken on inputs is required to be reversed. As during the relevant period, the appellant used granules to manufacture polythene films which in turn, was used for manufacture of laminated polyester films on which they were paying duty and consequently intermediate product held to be exempted in terms of notification no. 67/95. Consequent to the decision of the Hon'ble Apex Court, the final product was not dutiable, therefore, the appellant is required to pay a sum of Rs. 75,80,380/- towards duty on the said polyester and polythene film. The appellant exported certain consignment of metalized ....
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....he inputs and the same have been cleared as such, in that case also, whatever duty has been paid shall amount to reversal of Cenvat Credit and no demand is sustainable against the appellant. To support this contention he relied on the decision in the case of Ajinkya Enterprises Vs. CCE Pune-2013 (294) ELT 203 (Bombay) . 4. For denial of credit on inputs used in manufacture of metalized films, he submits that as per the CBEC circular no.283/117/96-CX dated 31.12.1996 the appellant is entitled to take Cenvat Credit on inputs which has been exported as such. Therefore, they are not required to reverse Cenvat Credit. If demand is on polythene films manufactured and captively consumed, it is the submission of the Ld. Counsel that the appellant has paid duty on the final product. Therefore, the same amounts to payment of duty on polythene films and captively consumed. For the demand of Rs. 14,70,682/- and Rs. 3,90,784/- the Ld. Counsel for the appellants drew our attention to the impugned order wherein the Ld. Commissioner has observed that the inputs have been procured clandestinely and same has been cleared clandestinely. If that is so, the inputs has been procured clandestinely que....
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....s. 75,80,380,/- involved on the Polyethylene film manufactured and consumed captively for processing of lamination without payment of duty, is demandable from M/s. LIPL in terms of Section 11A(i) ibid, along with due interest thereon under section 11AB ibid and whether M/s. LIPL is liable to pay penalty in this regard in terms of Section 11AC ibid. iv. Whether Cenvat Credit amounting to Rs. 14,70,682/- involved in the laminated film cleared clandestinely without payment of Cenvat Credit involved thereon is demandable from M/s. LIPL in terms of Rule 12/14 of the Cenvat Credit Rules 2002/2004 read with section 11A(i), ibid along with due interest thereon under section 11AB ibid and whether M/s. LIPL is liable to pay penalty in this regard under Section 11AC ibid. v. Whether Cenvat Credit amounting to Rs. 3,90,734/- involved in the processed goods viz. laminates in rolls (PLP in rolls) and Metalized polyester film cleared clandestinely is demandable from M/s. LIPL under Rule 14 of Cenvat Credit Rules 2004 read with Section 11A(i) ibid alongwith due interest thereon under section 11AB ibid and whether M/s. LIPL is liable to pay penalty in this regard in terms of Section 11AC ibid....
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.... goods under this Act or the rules made thereunder from the buyer of such goods] in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government." On plain reading of the said provision, it is very much clear that every person who is liable to pay duty under this act or rules made thereunder has collected any amount in excess of duty assessed or determined is required to pay to the Central Government amount so collected. As per the show cause notice, the allegation of the Revenue is that as the activity of the appellant does not amount to manufacture therefore, the appellant is not liable to pay duty. Therefore, the provisions of section 11D of the Act are not applicable to the facts of this case. Although the appellant has paid to the Central Government what amount is collected from the customers as duty, therefore, the demand under section 11D of the Act is not sustainable. Consequently, interest is also not payable. ii. Now we come to the second issue where demand on Cenvat Credit on the input used in metalized polyester film cleared for export has been confirmed. As per the CBEC Circular No. 345/2/2000 TRU ....