TaxTMI 
TaxTMI 
2024 (11) TMI 123
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....mount under rule 15 of CENVAT Credit Rules, 2004 in order [order-in-original no. PUN-EXCUS-001-COM-012-14-15 dated 25th June 2014] of Commissioner of Central Excise, Pune - I. 2. The allegation against the appellant was that credit of duty paid, on inputs used exclusively in the 'research and development (R&D)' division of the appellant, had continued to remain on their books despite the non-dutiability of the products emanating from the said division. The contention of the appellant is that these products are made use of in the manufacture of final products in their several plants and, consequently, within the meaning of 'inputs' as per rule 2(k) of CENVAT Credit Rules, 2004. 3. We have heard Learned Counsel for the appellant and Learned....
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.... on this pivot: whether the ancillary functions that support the manufacturing facility do contribute to output for the purposes of availment of credit. 6. It is here that the definition of manufacture in Central Excise Act, 1944, referred to by Learned Counsel, may provide some elucidation. It would appear that apart from production of excisable outputs any activity that is incidental or ancillary also constitutes manufacture. That the output of such incidental or ancillary operations may not directly result in goods that are excisable would not take it out of the ambit of manufacture and, prima facie, it would appear that the fruits of research and development facility ultimately finds its way, in form and in costs, to the excisable pro....
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....the records of the case carefully. The show cause notice issued to the appellants is not only based on the balance sheets but also on the raw material ledger for R & D issue register and the indent slips used for R & D. Therefore, the appellant cannot take advantage of the fact that the balance sheet is a public document and hence longer period is not applicable. There is clear evidence that inputs have been diverted for R & D purposes. The scope of the remand order of the Tribunal is very limited, as observed by the Adjudicating Authority. He was asked to examine whether R & D activity is an integral part of the manufacturing process. The contentions of the appellants that even the R & D activity resulted the manufacture of final product w....