TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 434
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....o the mark returned the said files for removing the defect to the appellant. The appellant availed Cenvat credit in terms of Rule 16(1) of Central Excise Rules, 2002 and after testing when it is found that the defects cannot be removed and they cannot reused, therefore, the same were cleared on payment of duty as a scrap. The case of the Revenue is that as these returned goods have been cleared as such therefore they are required to reverse the Cenvat credit availed on these returned goods under Rule 3(5) of Cenvat Credit Rules, 2004. The matter was adjudicated, the demand on account of reversal of Cenvat credit was confirmed. Aggrieved from the said order, the appellant is before me. 3. The ld. Consultant for the appellant submits that as....
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....sions of Rule 3(5) of Cenvat Credit Rules 2004 are not attracted to the facts of this case. Further in the case Tube Products of India (supra), this Tribunal has observed as under" "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 of sub-rule (2) of Rule 16. Revenue's contention is that the assessees should have paid the amount equal to the Cenvat credit taken at the time of receipt of the ....
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....etermined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be. (3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner. As seen from the above, we find that the sub-rule (1) stipulates circumstances under which duty paid goods can be returned to the factory and the assessee is entitled to take credit of duty paid on the said goods. The sub-rule (2) contemplates two situations (i) if the process undertaken by the assessee does not amount to manufacture, then ....
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....acture", the amount of credit availed under sub-rule (1) of Rule 16 had to be reversed under sub-rule (2). In the instant case, the tubes returned by the original consignee were removed as such without any process whatsoever. Even the show-cause notice admits these facts. The question is whether the second clearances of the goods would be covered by the first part of sub-rule (2) of Rule 16 as canvassed by the Revenue or by the second part of the sub-rule as contended by the assessee. In this context, it is pertinent to note that the goods returned by the original assignee were admittedly received by the assessee under sub-rule (1). They were received in the assessee's factory "for being re-made, refined, re-conditioned or for any other rea....
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....ufacturer 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 D3 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....
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....that "if the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CEVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on the goods received under sub-rule (1) at 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." The assessees have not subjected the returned goods to any process and, therefore, they are covered by the second limp of Rule 16(2). In the light of Tribunal's decision in Apollo Tyres Limited Vs. Commissioner of Central Excise, Pune-III - 2010-TIOL-549-CESTAT-MUM. The case law cited by le....