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2011 (9) TMI 862 - AT - Central ExciseAvailment of CENVAT Credit - benefit of credit in terms of Rule 16 of the Central Excise Rules, 2002 - Receipt of so-called non-marketable/non-saleable cigarettes returned by their own sales offices only - Held that:- In the face of the clear language of the above rule, the finding of the Commissioner that very first condition for eligibility of credit on returned goods is that the goods must be usable and used as inputs in the manufacture of finished goods is prima facie not tenable. Further, in the present case, a large percentage of tobacco (obtained by ripping open returned cigarettes) is used along with fresh tobacco in the manufacture of fresh cigarettes. Thus, prima facie, the assessees are entitled to credit in terms of Rule 16 and the duty demand is prima facie not sustainable in the light of Rule 16 and in the light of the decision of the Tribunal in Supreme Industries Limited v. CCE, Chandigarh reported in [2005 (7) TMI 164 - CESTAT, MUMBAI] and Hindalco Industries Limited v. CCE, Belapur reported in [2007 (6) TMI 35 - CESTAT, MUMBAI] - Stay granted.
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