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2015 (6) TMI 617 - AT - Central ExciseManufacture - cutting and slitting of imported self-adhesive film and self-adhesive paper - Manufacturing activity or not - assessee argued that in the process of slitting and cutting no new, distinct or different commodity comes into existence. The use of the goods also do not change - Held that:- Mere mention of a product in a tariff heading does not necessarily imply that the said product was obtained by the process of manufacturing. That, just because the raw material and the finished product came under two different headings, it cannot be presumed that the process of obtaining the finished product from such raw material automatically constituted manufacture. In the present case, merely because tissue paper in the jumbo roll of the size exceeding 36 cms.fell in one entry and the toilet roll of a width not exceeding 36 cms. fell in a different entry, it cannot be presumed that the process of slitting and cutting of jumbo rolls of toilet tissue paper into various shapes and sizes amounted to manufacture. Manufacture on the basis of value addition of 180% - Held that:- There is no change in the nature or characteristics of the tissue paper in the jumbo roll and the nature and characteristics of the tissue paper in the table napkin, facial tissues etc. Therefore, without such change in the nature or characteristics of the tissue paper, value addition on account of transport charges, sales tax, distribution and selling expenses and trading margin cannot be an indicia to decide what is manufacture. Thus, value addition without any change in the name, character or end-use by mere cutting or slitting of jumbo rolls cannot constitute criteria to decide what is "manufacture". - value addition criteria as applied by the Commissioner is erroneous. The activity undertaken by the appellant will not amount to manufacture. Tthis is not a fit case for confiscation of the goods under Rule 15(1) or imposition of penalty under Rule 15(2) of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Similarly, we are of the view that no penalty is required to be imposed on Shri Shailesh Nema, Director of the respondent-company under Rule 26 of the Central Excise Rules, 2002. - Decided against the Revenue. CENVAT credit has been utilised in the clearance of the final products which are now held to be non-dutiable, Revenue cannot seek to demand the credit so utilised. - Held that:- appellant should furnish the details of the credit taken and credit utilised for clearance of the corresponding final products and in case input credit taken is more than the duty paid on the final products, then the differential CENVAT credit needs to be reversed or paid back. Similarly, credit availed on capital goods need to be reversed or paid back. - Matter remanded back for limited purpose - Decided partly in favor of revenue.
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