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2016 (10) TMI 679 - AT - Central ExciseReturned goods cleared as scrap - Applicability of Rule 16 of CER, 2002 - CENVAT credit - similar issue for the same assessee for another unit[2016 (10) TMI 71 - CESTAT AHMEDABAD] stand decided - Held that: - the decision in the case apply where it was 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(f) of Central Excise Act, 1944. Therefore, on merit, the Appellant has no case. Period of limitation - Held that: - all the facts are disclosed to the Department. therefore, no merit in the impugned order on the aspect of limitation. The demand for extended period of limitation is not sustainable and hence set aside. However, the matter needs to remanded to ascertain the duty involved for the normal period of limitation. Accordingly, the matter is remanded to the adjudicating authority to re-determine the demand amount for the normal period of limitation - Appeal disposed off - decided partly in favor of appellant.
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