TaxTMI 
TaxTMI 
2015 (12) TMI 1004
X X X X Extracts X X X X
X X X X Extracts X X X X
....s are paying duty at the time of removing the goods as per the transaction value. It was alleged that the appellants are not reversing equal amount of cenvat credit availed for the rejected goods. After detailed investigation, a SCN dated 28.11.2005 was issued demanding differential duty and education cess between the cenvat credit taken and duty paid on the clearances to the dealers and also proposed interest and penalty under Section 11 AC of the Act. The adjudicating authority in his impugned order confirmed the demand of Rs. 1,21,99,895/- being the cenvat credit availed under provisions of Section 11A and also demanded interest and imposed equivalent penalty under Section 11A. Hence the present appeal. 3. Appeal No. E/61, 64, 66, 68, 69, 71/2012 The brief facts of these cases are that the respondent filed refund claims before the adjudicating authority being the differential duty arising on account of difference between the cenvat credit taken when the rejected goods were brought under Rule 16(1) of CER and duty paid on the transaction value when the goods were re-sold. The adjudicating authority issued a SCN following the principles of natural justice, rejected the refun....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the following case laws:- 1. Apollo Tyres Ltd. Vs. CCE, Pune-III 2011 (272) E.L.T. 84 (Tri. - Mumbai), 2. Craftsman Automation (P) Ltd. Vs. CCE, Coimbatore 2010-TIOL-945-CESTAT (Mad.) He submitted that on identical issue for the interpretation of Rule 16(2), this Bench has already allowed the appeal by following the decision in the case of Apollo Tyres Ltd. (supra). He further submitted that this Tribunals order has been accepted by the department and no appeal has been filed by the Revenue. 5. On limitation, he submitted that the demand is hit by limitation and out of the total demand of Rs. 1,13,47,938/- was hit by limitation and submitted that they have filed TR-1 returns for the month of February to March, 2003 and he drew out attention to page 73 and 85 of the paper book, wherein TR-1 returns at column 6A and 7B, they have clearly indicated that "returned under Rule 16(1), and removed as such under Rule 16(2)". They have consciously bifurcated and indicated in the returns. Further he submitted that while removing the goods they have clearly described in the invoices "removed as such". He drew our attention to invoices at page 28 of the paper book. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ounds f appeal and relied on the following citations:- 1. Toyota Kirloskar motor Pvt. Ltd. Vs. CCE, LTU, Bang. 2008 (225) ELT 385 (Tri.- Bang.) 2. Markfed HDPE Sacks Plant Vs. CCE, Ludhiana 2011 (271) ELT 396 (Tri.- Del.) 3. Hindalco Industries Ltd. Vs. CCE 2007 (215) ELT 547 (Tri.-Mum.) 8. We have carefully considered the submissions of both sides and examined the records of both assessee and Revenue appeals. The short issue involved in assessees appeal relates to demand of equal amount of credit availed on the duty paid goods returned under Rule 16 (2) o Central Excise Rules. The Revenue appeals is on the identical issue but related to refunds rejected by the adjudicating authority but the appeals were allowed by the L.A.A. for the subsequent period. 9. On perusal of the records we find that there is no dispute on the facts that certain quantities of finished goods were rejected and returned by the customers for various reasons and the cenvat credit of duty paid was taken by the appellants under Rule 16(1) and subsequently the rejected goods were sold in auction as such and cleared on payment of duty on the transaction value in terms of second leg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee does not amount to manufacture, then they shall pay the amount equal to the cenvat credit taken and (ii) in another case, the assessee pay duty on the returned goods as per the transaction value. In the instant case, it is established beyond doubt that no process has been carried out on the returned goods. Therefore, on the question of whether first part of sub-rule or the second part of sub-rule of Rule 16 is applicable, we find on the very same issue has been dealt in detail by the Tribunal's co-ordinate Bench, Mumbai in the case of M/s. Apollo Tyres Ltd. Vs. CCE, Pune-II (supra) allowed the appeal. The relevant paragraph of the Tribunal's order is reproduced as under:- "4. I have given careful consideration to the submissions. The case on merits would rest on correct interpretation of Rule 16. This provision was examined by a Division Bench of this Tribunal in the case of Hindalco Industries Ltd. (supra), but in that case, the first clearances were rejected by the consignee and hence brought back to the assessee's factory. After undertaking certain processes, in which waste and scrap were generated, the assessee cleared such waste and scrap on payment of duty at....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shall pay duty at the appropriate rate based on the value determined under 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 goods returned by the first consignee were subjected to any process before its second clearance to other units. Neither the original authority nor the first appellate authority entered any finding to the contra. In the order-in-original, on the other hand, there is an observation to the effect that the appellant had removed the goods as such without carrying out any process. The....