2021 (11) TMI 298 - CESTAT MUMBAI - Central Excise

Head Note / Extract:
Recovery of CENVAT Credit - finished goods returned back, on rejection by their customers on detection of certain defects - rejected goods, beyond repair - levy of interest u/r 14 of CER read with section 11AB of CEA - levy of penalty u/r 15 (2) of CENVAT Credit Rules, 2004 read with section 11AC of the Central Excise Act, 1944 - HELD THAT:- There seems to be no dispute on the issue involved in the matter. For the past period, in the appellants own case, KALYANI FORGE LIMITED VERSUS COMMISSIONER OF C. EX., PUNE-III [2006 (12) TMI 338 - CESTAT, MUMBAI] referred to by the authorized representative, tribunal, while dismissing the appeal filed by the appellants, held that the process of subjecting the returned goods to further inspection and test would result in process of manufacture of goods returned to the customer once again on payment of duty. Reliance also placed in the case of COMMISSIONER, CENTRAL GOODS AND SERVICE TAX COMMISSIONERATE VERSUS M/S INTERNATIONAL TOBACCO CO. LTD., R.K. GUPTA [2019 (12) TMI 336 - ALLAHABAD HIGH COURT], where it was held that Clearly, the goods were not brought back to the factory by the assessee to be “re-made”, “refined”, “re-conditioned”, “or for any other reason” as contemplated in Rule 16(1) of the Central Excise Rules, 2002. The transactions were devices to illegally avail Cenvat credit. The intent to illegal avail Cenvat credit and escape duty was fully established. There are no merits in the submissions made by the appellants challenging the penalty imposed on them - appeal dismissed.