2018 (6) TMI 1416

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....en and mixing facility provided by them and on which duty has been paid by M/s Prax Air. The Appellant availed Cenvat Credit on invoices raised by M/s Prax Air India Pvt. Ltd. on the duty paid on inputs and the same was cleared for captive use and certain quantity of the said gas was sent to the adjacent their own 100% EOU Unit and group company under the cover of AR - 3 on the basis of CT-3 certificate claiming exemption under Notification No. 22/2003 dt. 31.03.2003. They were issued show cause notice contending that the mixing of gases by M/s Prax Air does not result into manufacturing of new product and hence the goods removed by the Appellants were as such. That in terms of Rule 3 (5) of the Cenvat Credit Rules, 2004 they were liable to....

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....nd hence the inputs were removed as such which requires reversal of credit in terms of Rule 3 (5) of CCR, 2004. 4. We have carefully considered the submissions made by both the sides. We find that the main plank of the revenue is that the goods removed to EOU have been removed as such since the mixing of gases does not amount to manufacture and hence it requires reversal of credit. We find that the goods even if cleared as such to 100% EOU against CT - 3 certificate does not invite any reversal as removals are deemed export. Our view is also based upon the order of Hon'ble High Court of Karnataka in case of CCE, Bangalore - II Vs. Solectron Centum Electronics Ltd. 2014 (309) ELT 479 (Kar). Similar view has been taken by the Tribunal in v....

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....sed of. In case of BALA HANDLOOMS EXPORTS CO. LTD. Vs. CCE, CHENNAI 2009 (15) S.T.R. 483 (Tri. - Chennai), the Tribunal held as under: 9.3 Appellants take credit of duty paid on yarn and fabrics. At the time of receipt of inputs ie, fabrics, the appellants are not in a position to identify the fabrics which would be sent for job work for embroidering and for ultimate export. All the fabrics received including those which are subjected only to the processes enumerated by the lower authorities in their orders are exported. I find that the appellants used to be allowed refund in the same circumstances till the subject claims were filed and that the lower authorities denied the refund on the ground that the fabrics involved had not underg....