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2017 (8) TMI 899 - CESTAT AHMEDABADCENVAT credit - compensation received on imported inputs/goods of 9051 kgs. of PVC film which had been used in or in relation to the manufacture of finished goods - defective cylinders cleared as scrap - Held that: - There is no evidence on record to show that the defective PVC films were not used in the manufacture of finished goods. Merely receipt of compensation for defective inputs cannot be a ground for rejection of the credit availed by the appellant without establishing the fact that the said defective inputs had been used in or in relation to the manufacture of finished goods which the appellant categorically claimed in their reply to the show cause notice before the lower authorities - demand set aside. Defective cylinders cleared as scrap - Held that: - since the process of converting cylinders into scrap does not result into manufacture, the appellant required to reverse the credit availed under sub-Rule (1) of Rule 16 of Central Excise Rules, 2002 - demand upheld. Appeal allowed - decided partly in favor of appellant.
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