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2016 (10) TMI 71 - AT - Central ExciseRecovery of Cenvat credit - returned goods cleared as scrap - Rule 16 - Held that:- the Appellant had received in their factory the defective duty paid goods for remaking, refining, reconditioning etc. It is not in dispute that the certain quantity of such defective goods were remade/reconditioned and cleared on payment of appropriate duty. However, the major portion of the returned goods was scrapped and cleared from the factory after payment of duty on the transaction value of the scrap. It is the contention of the Department that the conversion of printed/unprinted corrugated boxes into scrap cannot be considered as a process of manufacture. Hence, the credit availed under Rule 16(1) is required to be reversed. I do not find any discrepancy in the observation of the learned Commissioner (Appeals) in this regard, in as much as the provisions of the said Rules are specific. In the present case, it cannot be said that the process by which the defective goods are converted into scrap, should be considered as manufacture within the definition of manufacture as laid down under Section 2(l) of Central Excise Act, 1944. Therefore, on merit, the Appellant has no case. Period of limitation - Held that:- appellant has meticulously maintained the Form V registers and filed D-3 intimation with the Department about receipt of the defective materials in their factory. Also, in the said register, it is maintained invoice-wise and clearance of scrap is also reflected. Also, in the monthly returns, the Appellant had indicated that the clearances of defective materials on payment of duty by making a remark as “material resupplied against D-3”. Therefore, in my opinion, all the facts are disclosed to the Department. therefore, I do not find merit in the impugned order on the aspect of limitation. - Decided in favour of appellant
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