TaxTMI 
TaxTMI 
2015 (10) TMI 370
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....on payment of duty at appropriate rate. The said pallets are also issued for captive usage in the factory for handling of inputs, semi-finished goods and finished goods viz. Jolly Pack Containers, Refrigerator Parts, Washing Machine Parts, Air Condition Parts, Cutlery etc. When the pallets are used captively, the appellant did not pay duty and availed exemption from duty under Notification No. 67/95-CE dated 16.03.1995, as amended. (ii) The appellant received inputs and availed Cenvat credit of duty paid on such inputs. Appellant found some inputs defective and not fit for further consumption and hence raised debit notes to supplier of inputs and recovered amount from suppliers. When the inputs for which credit is availed and not uti....
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....f the adjudicating authority. Aggrieved by the said impugned order-in-appeal, the appellant is before the Tribunal. 3. Heard both sides. The learned Advocate for the appellant submits that the impugned Pallets manufactured by them are admittedly used by them captively in their factory. It is his contention that it is used in or in relation to the manufacture of the final products and therefore, they are eligible for the benefit of exemption under Notification No. 67/95-CE dated 16.3.1995. As regards the debit notes of Rs. 6,280/-, he submits that the same is in nature of compensation for defective material supplied by their suppliers which were rejected during the production. He submits that this has nothing to do with availing of credit o....
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....ng contained in this notification shall apply to inputs used in or in relation to the manufacture of final products (other than those cleared either to a unit in a Free Trade Zone or to a 100% Export Oriented Undertaking or to a unit in an Electronic Hardware Technology Park or to a unit in a Software Technology Parks), which are exempt from the whole of duty of excise leviable thereon or are chargeable to Nil rate of duty. Explanation. - For the purposes of this notification inputs does not include - (i) packaging materials in respect of which any exemption to the extent of the duty of excise payable on the value of the packaging materials is being availed of for packaging any final products; (ii) packaging materials or containers, the ....
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....tification and are exempted from the payment of duty of excise. In the instant case, the impugned goods namely, Pallets classifiable under Chapter 39 is covered by the description of inputs in Column-2 and the final products namely, Articles of Plastics and other goods classifiable under Chapter 39 and 84 are covered by description of final products specified in Column -3 of the notification. It is also observed that the adjudicating authority has observed."I find that the appellants have used the Pallets in the factory premises for keeping their other finished goods viz., Jolly Pack Containers, Refrigerator Parts, Washing Machine Parts etc. and not for excisable activities." It is therefore, clear that the impugned Pallets are manufactured....
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....sable value, against which the appellants have taken cenvat credit.The appellants are rightly eligible for the same and hence the demand is not justified. The Hon'ble Delhi High Court in the case of Ashi India Safety Glass Limited vs. UOI - 2005 (180) ELT 5 (Del.) has held that when the material is used in the manufacturing process and merely because at a later point of time after the material has undergone the process of manufacture, it was found defective and rejected or part of the input being found defective and rejected, this is no ground for denying the benefit. The Hon'ble Tribunal in the case of CCE, Bangalore vs. IFB Automotive (P) Limited - 2010 (261) ELT 340 (Tri. Bang.), in an identical issue, has held that the cost which has be....