2008 (1) TMI 406

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....dra Nair, J.]. - This is an appeal filed under Section 35G of the Central Excise Act against an order of the Tribunal confirming dis-allowance of Cenvat credit claimed by the appellant under Rule 16(1) of the Central Excise Rules for the goods returned. The appellant was engaged in manufacture and sale of Aluminium Extrusions and Aluminium parts of electric motors. The appellant took credit at Rs.....

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....the appellant and Shri P. Parameswaran Nair, Asst. S.G., appearing for the respondent. 3. Counsel for the appellant contended that credit taken under Rule 16(1) is not controlled by sub-rule (2) of Rule 16 and both sub-rules operate differently. Counsel further submits that sub-rule (2) also does not make it a condition for availing Cenvat credit under Rule 16(1) that the goods returned should ....

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....lars of such return in his records and shall be entitled to have CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2001 and utilise this credit according to the said rules. (2) If the process to which the goods are subjected before returning does not amount to manufacture the manufacturer shall pay an amount equal to the CENVAT credit taken un....

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....ondition that it should be re-conditioned or re-manufactured and returned to the same party. On the other hand the purchaser can treat return as a sale cancellation and claim refund of price paid for the goods. In either case when goods are returned as defective goods warranting re-conditioning or re-manufacturing or otherwise, the manufacturer is entitled to take Cenvat credit as if such goods ar....