TMI Blog2007 (11) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... looms Export Company (BHEC), Chennai. These two appeals have been filed by BHEC. The appellant generally procures yarn and gets it bleached, dyed, converted into fabrics and embroidered through job workers. Occasionally they also purchase fabrics of Chapter Heading 5406. These and the job worked goods are exported. As per the impugned order, the refund in question relates to credit of duty paid on purchased fabrics of CSH 5406 which were exported. The lower authorities have denied the refund of credit under Rule 5 of CENVAT Credit Rules (CCR) on the ground that the appellants had not undertaken any process of manufacture on the fabrics (inputs) received. As per the orders the purchased inputs were subjected to the following operations befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Central Excise Law, it would amount to manufacture for the purpose of export." 3. The original authority rejected the plea of the appellants that their case was similar to the one dealt with by the Tribunal in CCE vs. Weston Electronics reported in [2000 (116) ELT 181 (T)]. In the said decision the Tribunal had allowed the appeal filed by M/s. Weston Electronics, an EOU, after noting the CBEC Circular clarifying the scope of Notification No.1/95-CE dated 1.3.95 (supra). The Tribunal decided that packing of recorded audio CDs in jewel boxes with printed titles of songs etc. in export worthy packing entitled the imports of inputs made by the EOU to exemption extended under Notification No.13/81. The benefit was subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner (Appeals) found that the appellants had procured the fabrics and exported the same without undertaking any process which amounted to manufacture. He held that input had been cleared as such and the provisions of Rule 5 of CCR did not cover refund of such input credit. Accordingly he upheld the order of the original authority. 6. In the appeal before the Tribunal it is submitted that the appellants are manufacturer/exporter of powerloom polyester fabrics and powerloom mixed fabrics falling under Chapter sub heading 5406 and 5513 respectively. They held registration certificate issued by the Department for manufacture of the above goods. They had Golden Export House status. It was not in dispute that the credit availed goods wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CENVAT scheme and avail credit of duty paid on inputs including yarn and fabrics. They claim that as per Note 4 of Chapter 54, multiple folding of fabrics undertaken by them was a specified process of manufacture in respect of goods falling under 5401 to 5405. They subjected the fabrics to various processes which, according to them, constituted manufacture for the purpose of export. I find that these processes do not constitute manufacture as defined in Section 2(f) of the Act. 9.1 I find that the Board's Circulars on galvanizing of metal or blending and packing of tea cited were issued to clarify the scope of Notification No.1/95 CE dated 1.3.95 and are not relevant to the dispute in question. These were processes of manufacture f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had not undergone any process of manufacture as interpreted by the Apex Court in the case of CCE Vs. Maharashtra Fur Fabrics Ltd. (supra). 9.4. As per the Explanation to erstwhile Central Excise Rules (CER) 12 and rule 13, "manufacture" includes the process of blending of any goods or making alterations or any other operation thereon. Replacing of the CER "44 with CER 2001/02 did not curtail any benefits the trade had enjoyed in relation to export. Moreover if the manufacturer of the impugned goods or a merchant manufacturer were to export them, the exporter would have been granted the duty paid on the fabrics. 9.5 I find that Rule 5 of the CENVAT Credit Rules reads as follows:- Rule 5 Refund of CENVAT Credit : "Where an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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