2016 (1) TMI 263

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....: Shri S Naunthuk, AR ORDER Per B Ravichandran The present appeal is against the order of the ld. Commissioner (Appeals) dated 24.01.2006. The appellants are engaged in the manufacture of razor and razor blades subjected to central excise duty. They undertake job work for M/s. Gillete India Ltd and the components are supplied either by M/s. Gillete India Ltd. or by their vendors. The appe....

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....ad that as a job worker for M/s. Gillete India Ltd., they receive parts of razors and tucks of blades from the principal. They undertake the assembly of razor, blister pack razors with tuck of blades and clear such combined blister packs. On packs, it was mentioned that blades were being supplied free with the razors. The Department took the view that since the blades were supplied free cenvat cre....

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....ack. The endorsement to the effect that the blade is free is a marketing strategy and it is a form of trade discount on the pack. He further contended that the department proceeded to recover the cenvat credit on blades in terms of Rule 6 of the Cenvat Credit Rules, 2002. Rule 6 has no application in their case as there is no exempted goods involved. 3. Ld. AR reiterated the findings in the imp....

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.... apply in respect of the inputs used in or in relation to the manufacture of exempted goods. Now, it would appear that the department equated the supposed "free" blades with exempted goods. Otherwise, Rule 6(1) has no relevance. Calling a free supplied good as exempted goods is legally unsustainable. Ld. Commissioner (Appeals) categorically states that the Board's circular dated 28.10.2002 reg....