AI Drafter 
TaxTMI 
TaxTMI 
2020 (4) TMI 833
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....ds Central Excise Registration. They also hold service tax registration for payment of service tax on services rendered by them and also on services received by them under reverse charge mechanism. On perusal of records, the department noticed that appellant, among other things, procured Microcat DVD from Australia classifying it under Customs Tariff Heading 8523. Thereafter, they were repacking the DVDs and selling them as motor vehicle part under tariff heading 8708 discharging excise duty based on MRP under Section 4A of the Central Excise Act, 1944. 4. The department was of the opinion that packing or repacking of a DVD does not amount to 'manufacture' and therefore appellant was not required to pay excise duty at all and the DVDs wh....
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.... which they filed regularly with the Central Excise Department. There is no allegation in the SCN that they have not disclosed anything that needs to be disclosed in their returns. Under these circumstances, the entire demand is time barred and therefore needs to be set aside on this count alone. Consequently, the demand of interest and imposition of penalties also need to be set aside. 7. On merits, he would argue that they had imported Microcat DVD from Australia classifying it under Customs Tariff Heading 85234080. They had classified DVD under 8708 instead of 8523 which was a bonafide mistake and they had no intention to evade payment of duty. In fact, he would submit that they had paid duty which, according to the SCN, need not have....
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....es - 2013 (294) ELT 203 (Bom.) and Creative Enterprises - 2009 (235) ELT 785 (Guj.) In view of the above, he would urge that demand for reversal of cenvat credit availed must fail both on merits and on limitation. Consequently, the demand of interest and imposition of penalty also do not survive. He prayed that the impugned order may be set aside and the appeal may be allowed. 8. Per contra, Ld. D.R supports the findings of the lower authorities. He would urge that cenvat credit is available only if the goods are used for manufacture of the final product and such final products are chargeable to excise duty. Where the final products are exempt, the input credit cannot be taken. In this case, the appellant has not undertaken any manufactu....
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.... the appellant amount to 'manufacture'. Undisputedly, all that the appellant had done was repacking the goods and affixing MRP stickers on them. The appellant's argument is that in terms of Section 2 (f) (iii) it does amount to 'manufacture'. Section 2(f) is reproduced below : (f) "manufacture" includes any process,- (i) incidental or ancillary to the completion of a manufactured product; (ii) which is specified in relation to any goods in the section or Chapter notes of [the First Schedule to the Central Excise Tariff Act, 1985 as amounting to [manufacture; or (iii) which, in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labellin....
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....ailed on the imported DVDs. However, we find that the appellant has filed the returns which were legally required, with the department. Scrutiny of such returns and calling for any further information would have disclosed this fact that appellant was paying the central excise duty wrongly. The department could have directed them not to pay central excise duty accordingly but the department has not done so. Therefore, we find that the erroneous payment of the appellant made as central excise duty was not detected by the department despite the appellant disclosing in their returns the details which they were mandatorily required to disclose. Under these circumstances, we find that the demand for reversal of CENVAT credit invoking extended per....