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2016 (11) TMI 140 - CESTAT HYDERABADProcess of separating valuable mineral sands from ordinary sea sand - whether the process amounts to manufacture or not? - Held that: - at the end of this process the chemical structure of the one remained the same; there was no crystallographic transformation and hence the process will not amount to manufacture - reliance placed on the decision of India Rare Earth Ltd. Vs. Commissioner [2001 (9) TMI 167 - CEGAT, KOLKATA] where it was held that similar process does not amount to manufacture. CENVAT - whether CENVAT Credit already utilized for payment of duty on final products can be denied or required to be reversed? - Held that: - there are a plethora of judgements which have ruled that once duty on final product is accepted by Department, CENVAT credit cannot be reversed even if said activity does not amount to manufacture. Lapse of unutilised credit - Held that: - The provision of Rule 11 (3) would meet situations in which there is different periods of exigibility to excise duty and non-exigibility to duty. The law is thus very clear on this point, hence unutilised credit in the appellant's case cannot be allowed for any further payment of duty and will necessarily lapse. So the claim of the appellant that the CENVAT credit lying in their balance, which was taken when the process was not manufacture, cannot be allowed to pay duty for finished products after 2011 when the process is treated as manufacture as per new Chapter Notes. Levy of penalty u/r 15 of CENVAT Credit Rules 2004 - Held that: - penalty set aside. Appeal disposed off - CENVAT credit of Re availed and utilised for payment of duty on domestic and export clearances is non-recoverable - CENVAT Credit of ₹ 1,41,58,285/- lying in balance is CENVAT Credit account as on 31-03-2011 shall lapse - Penalty of ₹ 2000/- imposed by adjudicating authority is set aside - appeal partly allowed in favor of appellant.
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