2025 (1) TMI 1628

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....h. The Single Member Bench of this Tribunal vide his order dated 23.02.2018 referred the matter to the Larger Bench after noticing the contrary decisions of the Tribunal in the cases of Classic Stripes Pvt Ltd reported in 2018 (8) GSTL 442 (Tri. Mumbai), VFC Industries Pvt Ltd reported in 2017 (347) ELT 189 (Tri. Ahmd.) and Menon Piston Rings Pvt Ltd reported in 2007 (211) ELT 394 (Tri. Mumbai). The Single Member Bench has made the following reference: "In terms of Rule 16(2) of the Central Excise Rules, 2002, whether the assessee is required to reverse the CENVAT Credit on the returned goods which are not further processed and cleared as scrap or not?" 2. In order to answer the reference, it is essential for us to examine the f....

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....We have heard the learned Authorized Representative for the department. The learned Authorized Representative submits that the reference made by the Single Member Bench of this Tribunal vide its order dated 23.02.2018 has already been considered by various Division Benches of the Tribunal and this issue is no more res integra. In this regard, he cites the decision of the Division Bench of the Tribunal in the case of CCE, Jaipur-I vs. R.F.H. Metal Castings (P) Ltd reported in 2005 (184) ELT 194 (Tri. Del.), wherein on the identical facts, the Tribunal has examined the issue and has come to the conclusion that when the goods were brought back to the factory for re-making but no process was undertaken and the defective goods were cleared as sc....

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.... thereof are brought to any factory for being remade, refined, re-conditioned or for any other reason, the assessee shall be entitled to take the CENVAT Credit of the duty paid as if such goods are received as inputs. Sub-rule (2), further, provides that if the processes to which the goods are subjected before being removed does not amount to manufacture, the assessee shall pay the amount equal to the CENVAT Credit taken under sub-rule (1). It is not in dispute that the processes undertaken by the assessee did not amount to manufacture. The fact that the scrap is different from goods does not mean that the scrap has occurred as a result of manufacturing process. No one undertakes the process of manufacture to make the scrap. We, therefore, ....