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2015 (1) TMI 1040 - CESTAT NEW DELHICenvat credit - Colour Picture Tubes (CPT) are cleared on payment of duty - Re-manufacture and re-making of tubes - Held that:- Defective CPTs, which had earlier been cleared on payment of duty, had been received back in the factory for being re-made in the terms of the provisions of Rule 16 of the Central Excise Rules, 2002. From the records, it is clear that the defective CPTs received back had been dismantled and thereafter by using salvaged parts and fresh parts, the entire process of manufacturing is undertaken on the same production line. The fresh CPTs made had been cleared on payment of duty. Under the provisions of Rule 16 of the Central Excise Rules, 2002, when duty paid goods are returned to the factory of manufacture, for being repaired, remade, refined, reconditioned, etc., the manufacturer take the cenvat credit of the duty originally paid and thereafter in terms of provisions of sub-rule (2), at the time of clearance of the repaired/remade goods, if the process undertaken does not amount to manufacture, he is required to pay the duty amount equal to the cenvat credit taken, but if the process amounts to manufacture, he is required to pay the duty chargeable on the goods at the rate applicable on the date of removal and on the value determined under the provisions of Section 3(2), Section 4 or Section 4 A, as the case may be. There is no provisions in Rule 16 that Cenvat credit in respect of the inputs used in the process of repairing/refining would not be available. Appellant had disclosed the process undertaken by them as early as in the month of May, 2001 in respect of the defective CPTs received from their customers and hence, the department cannot allege suppression of facts saying that the appellant had not disclosed that they were taking Cenvat credit on the inputs used in re-making of the goods. In view of this, there is merit in the appellant plea. In these circumstances, I hold that the appellant has correctly availed the Cenvat credit on input and the same cannot be denied - Decided in favour of assessee.
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