TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 205
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....r Chapter sub-heading 7215 and 7228. They received rejected finished goods under Rule 16 of Central Excise Rules, 2002 and availed credit of the excise duty paid on its removal from the factory. As per the provisions of Rule16(1) of Central Excise Rules, 2002, the assessee, who has received the goods back is entitled to take the Cenvat credit of the duty paid, as if such goods are received as "inputs" under Cenvat Credit Rules, 2002. If the process to which the goods are subjected to before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the Cenvat 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 ....
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....ces dated 30.10.2008 and 11.04.2009 were issued for the period 2005-06 and 2007-08 respectively. After due process of law, the original authority confirmed the demand of Rs. 48,279/- in show-cause notice dated 30.10.2008 and Rs. 10,29,855/- in show-cause notice dated 11.04.2009. In appeal, the Commissioner (Appeals) upheld the same. Hence these appeals. 4. On behalf of the appellants, the learned counsel Shri M.N. Bharathi mainly argued on the ground of limitation. He submitted that the appellants received the returned/rejected finished goods vide Invoice-cum-Delivery Challans and the same will be given RMIR No. at delivery dispatch stage. After giving RMIR No. the same will be given to production point. By adopting the processes such as p....
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.... the inputs - bars, and cleared to the sister Units amounts to manufacture and, therefore, the duty paid by the appellants is correct. 6. Specifically on the ground of limitation, the learned counsel adverted to letter dated 11.05.2004 issued by the Additional Commissioner to the appellants. The appellants had made repeated representations to the department to clarify whether the process of conversion of Black Bars into Bright Bars would amount to manufacture or not. The Additional Commissioner vide letter dated 11.05.2004 informed that since the processes involved heat treatment/annealing, pickling, polishing, grinding, peeling etc., besides, sample drawing, the processes engaged undertaken by appellants amounts to manufacture. He adverte....
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.... by the appellants falls, the definition of "manufacture" reads as follows:- "In relation to the products of the Chapter, the process of drawing or redrawing the bar, rod, white rod, round bar or any other similar articles into bright bar shall amount to manufacture." The processes undertaken by the appellants on the returned goods are nothing but peeling, grinding, bend removal, rust removal, straightening etc. These processes are not covered under Note 4 of Chapter 72 as "manufacture". Hence, the provisions of Rule 16(2) are not applicable to appellants and they have to pay the amount equal to the Cenvat credit taken by them on the returned goods. The argument of the appellants that they were under the belief that the process undertake....
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.... 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 dispute is whether the process undertaken by the appellants on the returned goods amounts to manufacture or not. Page 84 of the appeal memorandum contains a letter issued by the Assistant Commissioner to the appellants from which it can be seen that the appellants had made representations dated 30.03.2004 and 21.04.2004 seeking clarification whether the process of conversion of black bars into bright bars engaged by them amounts to manufacture. Along with this, they have also supplied photographs and also a flow chart. The flow chart gives t....
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....ue as provided under Rule 16 since according to them as well as the clarification of the department, the process amounted to manufacture. From these facts it is very much clear that the appellants are not guilty of any suppression of facts coupled with intention to evade payment of duty. 11. The Hon'ble Apex Court in the case of Commissioner of Central Excise, Chandigarh Vs M/s. Vee Kayan Industries reported in 1996 (89) E.L.T.262 (S.C.) had held that the processing of Round Bars into Bright Bars does not amount to manufacture. The department by Trade Notice No. 18/2003, dated 14.08.2003 clarified that the process of making Bright Bars from Wire Rods amounts to manufacture and credit was being allowed on inputs. A further Trade Notice ....