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2013 (9) TMI 240 - AT - Central ExciseBenefit of CENAVAT credit or returned goods - Defective Goods - Rule 16 - Revenue was of the view that there was no evidence to prove that the goods received under Rule 16 had been cleared subsequently under appropriate document and on payment of appropriate duty - Held that:- The rejected goods after receipt in the unit have been accounted and stock accounts and credit had been availed by them under Rule 16(1) of CER, 2002 - the rejected/returned goods had been duly accounted for in the registers and credit had been correctly availed – The goods and raw material account, had been subsequently issued for production in the normal course and the final products emerged had been accounted for in the daily production register. Forgings had been cleared on payment of duty by the assessee to their buyers, that the latter found the same to be defective and returned the same under proper duty-paying documents to the assessee and that the goods were subjected to some process - if correlation was established between the defective forgings and the defect-free forgings, the assessee was entitled to the credit in question - This correlation was established at the original level and the same was not cogently challenged by the Revenue before the Commissioner (Appeals) - In any case, it is not the case of the Revenue that Rule 16 was not applicable to a case where defective goods returned by the buyer were subjected to a process of remaking defect-free product - The original authority took an eminently correct view after verification of records including Annexure-10 discussing the facts of the case in the light of Rule 16 as correctly understood by that authority - Order set aside - Decided in favour of Assessee.
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