2015 (9) TMI 983

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....ves Ltd. (IAL for short) and as per the agreement raw materials are directly supplied to the appellant for tolling activities and after conversion of the raw material, appellant sells the same to the customers of IAL. One of the raw materials which is imported is polymer. The said polymer is used in two different streams. First stream is for manufacture of lubricating oil wherein appellant add the said polymer in the base oil and after manufacture of the lubricating oil, the same is cleared classifying under Chapter 27 as lubricating oil on payment of appropriate duty. There is no dispute as far as use of polymer in the manufacture of the lubricating oil and payment of duty of such lubricating oil is concerned. In the second stream, a part ....

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....lassified the product as chemical additives under Chapter 38 under 3811 1900 or 3811 2900. The dispute in the case is relating to the goods so cleared. The appellant is clearing the goods as a manufactured product and paying duty under Chapter 38. Revenue's contention is that the imported goods are classifiable under Chapter 39 and the process of cleaning, repacking and relabeling does not amount to manufacture and thus there is no manufacture of "chemical additives for lubricating oil" and the goods are being cleared as such and is to be considered as "the input cleared as such" and the appellant was required to reverse the Cenvat Credit availed at the time of clearance as chemical additives for lubricating oil. 2. Revenue issued de....

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....a) Hino Motors Sales India P. Ltd. 2014 (299) ELT 49 b) Foam Techniques Mfg. (I) P. Ltd. 2015 (317) ELT 266 c) CCE vs. Creative Enterprises 2009 (235) ELT 785- Affirmed by Supreme Court 2009 (243) ELT A 120  d) CCE vs. MP Telelinks Ltd. 2004 (178) ELT 167 e) CCE vs. Ajinkya Enterprises 2013 (294) ELT 203 f) Ashok Enterprises 2008 (21) ELT 586 g) Super Forgings & Steels Ltd. 2007 (217) ELT 559 h) Steumpp Schedule & Somappa Ltd. 2005 (191) ELT 1085 3.2 The second submission of the ld. counsel was that the quantification of duty is not correct as the duty has been quantified on the basis of total duty suffered divided over total quantity of imported polymer. 3.3 The next submission of the ld. counsel was the extend....

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....oods by them. Ld. AR further submitted that it was only during audit in the factory that it was realised that the appellant did only repacking and relabeling which does not amount to manufacture and change in classification of the appellant is incorrect. It was also submitted that after the said objection, the appellant has changed the classification and also started clearing such goods as inputs cleared as such after reversal of duty under Rule 3(5) of CENVAT Credit Rules, 2004. It was further submitted that the perusal of the monthly return would indicate that the appellant was availing the credit on imported inputs. The return did not indicate the details of the imported inputs or the classification. Further, at the time of clearance all....

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....t taken by the appellant. All that revenue is asking the appellant is to pay the differential amount i.e. the difference between the Cenvat credit taken at the time of importation/receiving of inputs minus the duty paid at the time of clearance of such inputs. We do not find anything wrong in the same and we uphold the demand on merits. The appellant has submitted a catena of case laws to support that having collected excise duty, Cenvat Credit cannot be denied. We observe that Revenue is not denying the Cenvat credit taken. We observe that appellant is working under the self assessment procedure. In the monthly return they have described goods under Chapter 38 and paid duty. It is only during physical verification and audit of the factory ....

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....indicated as under:- Cetsh No. Descripti-on of Goods Unit of Quantity Opening Balance Quantity Manuf- Actured Quantity Cleared Closing Balance Assessable Value (Rs Type of Clearance 38112900   KG 0 185185 201110 0 16521360   From the above columns, it is very clear that nobody can make out that the credit on inputs taken are falling under Chapter 39. Further, while clearing the goods no description is mentioned and the classification of the goods mentioned is 38. It is not possible from the above description for any human being that the inputs have been cleared as such and the classification of the input have been changed. We do not see any reason for the appellant ....