TaxTMI 
TaxTMI 
2017 (2) TMI 671
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....dra are engaged inter alia in manufacture of tractors. On 9.7.2004 tractors were exempted from Central Excise duty. In the month of July 2004 and August 2004 M/s. Mahindra & Mahindra took credit of inputs. The inputs were cleared to the job worker and received back from the job worker without payment of duty under job work scheme. While clearing the tractors the appellant paid 8% amount in terms of Rule 6(2) of the Cenvat Credit Rules. From 1.9.2004 onwards till May 2005, M/s. Mahindra & Mahindra stopped taking credit of inputs. They cleared the goods to the job worker and received the same back without payment of duty. This said goods were used for manufacture of tractors which were cleared without payment of duty under exemption. The appe....
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....ssembling (i) Carrier LH & RH (ii) Axle (iii) Bearing inner, (iv) Bearing outer (v) Retainer (vi) Circlip (vii) Oil Seal (viii) Wheel Bolts, 3/8 Bolts (ix) Spring Lock Washers (x) Gasket into 'Rear Axle Carrier sub-assembly' does not amount to manufacture. The appeal memorandum argues that it is like putting pneumatic tyre and tube on the wheel. They have cited various case law where various processers like putting socket on plastic pipe or connecting tub wheel on Axle rod or mixing ores have not been considered as process of manufacture. Firstly in all these cases the facts are different. In the instant case an 'Rear Axle Carrier sub assembly' comes into existence after precision assembly of as many as ten ....
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....In this regard the term duty of excise has been interpreted by the Tribunal in the case of Mahindra & Mahindra 2007 (211) ELT 481. In para 31 of the said decision, the Tribunal has observed as follows: "31. The next question arises is whether tractors on which automobile cess and education cess is payable can be considered as exempted from the whole of duty of excise thereon or chargeable to nil rate of duty as required under Rule 2(d) of Cenvat Credit Rules. Here we find that the terms exempted goods has been defined under Section 2(d) of the Cenvat Credit Rules, 2002/2004 as under :- "Exempted goods" means goods which are exempt from whole of duty of excise leviable thereon and includes goods which are chargeable to nil rate of duty....
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....m used is not 'any duty of excise' but 'duty of excise' only. Similarly the decision in the case of Silvasa Industries Pvt. Ltd. v. C.C.E. - 2006 (196) E.L.T. 213 (T) is also not relevant as in that case, finished goods were exempted only from NCCD and were otherwise chargeable to other duties which may include excise duty also. The Tribunal was no where required to interpret the term 'exempted goods' as defined under Rule 2(d) of the Cenvat Credit Rules and the issue as to whether the final product which is exempted from excise duty but chargeable to cess can be considered as exempted goods or not. Since the tractors are exempted from duty of excise specified both in First Schedule of the Tariff Act and Second Schedule to the Tariff Act, i....
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....anufacturer. Thus failure to file declaration under Notification No. 214/86 cannot be ignored, as it is substantive requirement and not merely procedural formalities. In view of the above the benefit of Notification No. 214/86 cannot be extended in this case. The appellants have relied on the decision of Hon'ble High Court of Kerala in the case of Commissioner of C.Ex. & Cus., Cochin dVs. Excel Corrugated Boxes (P) Ltd. to assert that the non-filing of declaration can be ignored. It is seen that in the case of Excel Corrugated Boxes (P) Ltd. (supra), the situation was revenue neutral and any duty paid on the job worker was available to the principle manufacturer as credit. In the instant case the situation is not revenue neutral as the trac....
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.... Rates shown in the duty paying documents and Returnable Gate Pass cum Challans are not relatable. 7. On some invoices M&M have availed credit of cess, Partial availment is not permissible." We find that the cenvat credit has not been rejected on the ground that the said inputs have not been used for the manufacture of said products. It is in fact the entire notice is based on the assertion that certain goods have been supplied by Mahindra & Mahindra to the appellant for manufacturing of sub-assemblies and duty on said sub-assemblies have been demanded under these proceedings. In these circumstances credit of duty has to be allowed in respect of which the appellants are able to establish that the same were used in manufacture of the s....