2016 (11) TMI 180

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....ion appliances i.e. deep freezers and water coolers. On the basis of intelligence, the officers visited their factory and carried out verification of Form V register (for receipt of duty paid goods for repair). It was revealed that in many instances, the machines which were received by them for repairs under duplicate copies of their own invoices issued at the time of clearance. However, the machines have not been sent back after repairs nor produced before officers for inspection. In his statement dated 6.4.2004, the Director of the appellants Shri Ajay Kumar Premrajan Sadani stated that the machines for repairs were not available for inspection as the said goods have been scrapped. In the statement dated 5.4.2004, Shri Kiran Kumar, Works ....

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.... Act, 1944. He also argued that there was no suppression as Form V Register was found which contained entries of goods and there were isolated cases of scrapping. Hence, these cannot be partial mental culpability. 4.  Learned AR for the Revenue argued that the situation in the instant case is squarely covered under Rule 16(2) of the Central Excise Rules, 2002 since there has been no process of manufacture. As such, the appellants were liable to pay an amount equal to CENVAT Credit taken by them. He stated that the issue is no longer res integra and it has been decided by the Tribunal in their favour in the following judgments: -  (a)  Markfed HDPE Sacks Plant Vs. Commissioner of Central Excise, Ludhiana - 2011 (271) ELT....

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.... the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be. Explanation. - The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods." A plain reading of the above Rule shows that sub-rule (1) of the Rule lays down the requirement of such goods to be recorded, entitlement of assessee to input credit on such goods and its utilization as per rules. It does not cover the situation where such goods have been removed. The assertion of learned Advocate that sub-rule (1) ibid applies to them is not correct and proper. Sub-rule (2) covers the scenario where suc....