TMI Blog2007 (8) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... and Shri T.K. Jayaraman, Member (T) S/Shri K.S. Ravi Shankar and K.S. Naveen Kumar, Advocates, for the Appellant. Shri Anil Kumar, JDR, for the Respondent. [Order per: T.K. Jayaraman, Member (T)]. - The stay petition and appeals have been filed in respect of Orders-in-Appeal Nos. (i) 75/2006-C.E., dated 26-12-2006 and (ii) 26/2006 dated 22-3-2006 passed by the Commissioner of Central Excise (Appeals-II), Bangalore. 2. S/Shri KS. Ravi Shankar and K.S. Naveen Kumar, the learned Advocates, appeared for the appellant and Shri Anil Kumar, the learned JDR, for the Revenue. 3. We heard both the parties. 4. The issue involved in both these appeals is one and the same. Hence, we are passing a common order. As the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.) wherein it is held that a Rule cannot override or be contrary to provisions of Section. 5.1 In the present case, initially, when the goods were cleared, a certain amount of duty was paid. But, after they were returned and at the time of second clearance, which is actually on sales, the price came down and the appellants paid duty on the Transaction Value. In other words, they did not reverse the Cenvat credit originally taken. They reversed only a lesser amount or paid duty, which is less than the original duty paid by them at the time of removal of the vehicles to the show room. The learned Advocate forcefully argues that whenever there is a removal, it is the Transaction Value, which is the basis for payment of duty, and the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner. 5.2 On a careful examination of the above Rules, we find that the first sub-rule refers to the goods on which duty had been paid at the time of removal being return to the factory for various purposes. Rule 16 applies only to such of the goods, which have been removed from the factory and on which the duty has been paid. At this time, we have to pause and assure ourselves that when any item is removed from a factory, duty has to be paid even in the absence of sale and how to pay the duty? Payment of duty is based normally on S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-Rule (1) of Rule 16 of the Central Excise Rules, 2002. 5.3 Coming to the second sub-rule, once the goods have been received back, what happens to them? It is quite possible that some process is carried out which does not amount to manufacture. The other possibility is certain processes are carried out which amounts to manufacture. Therefore, sub-rule (2) of Rule 16 envisages two situations. The first situation is where there is no process of manufacturing involved. In such cases, in terms of that Rule, whatever Cenvat credit has been taken on the returned goods, the same has to be paid at the time of removal of these goods. Now, we have to question whether this particular provision is against Section 4. We have already made it clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o may allow the removal subject to certain conditions, which are specified by him. The appellants could have, removed the goods by executing a bond for return of the goods either without payment of duty or even paying duty on a provisional basis. They could have done that. So long as they have invoked Rule 16(1) for the return of the goods, Rule 16(2) automatically follows and we have already shown that these Rules are not repugnant to Section 4 of the Central Excise Act, as Section 4 or other provisions of the Central Excise Act have been taken into account at the time of removal of the goods for the first time. In view of the above observations, we do not find any merit in these appeals. The appellants are liable to pay the differential d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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