TMI Blog2010 (10) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... acture in the assessee’s premises. Cenvat credit - The processes carried out by the assessee would not amount to manufacture, the corollary is that the appellant had cleared the rectifiers on which the credit was availed as such - Hence, the appellant has to reverse the actual amount of CENVAT credit availed on such rectifiers. Penalty - Appellant had been filing monthly returns regularly and was intimating the Revenue about the activities carried on, as per his bona fide belief that the rectifiers, would amount to manufacture, has been discharging the Central Excise duty on final products cleared from his factory - This act of the appellants cannot be considered as mis-statement or suppression of facts - If the Revenue authorities were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant on the rectifiers, would not amount to manufacture and does not alter the nature, use and outlook of the rectifier. Coming to such a conclusion, the Audit party directed the appellant to reverse the differential amount of credit taken by them on such rectifiers. The assessee contested the said Audit Note on the ground that the processes carried out by them would amount to manufacture. Show-cause notices were issued to the appellant demanding differential duty/CENVAT credit availed with the proposition for imposition of penalty and demand of interest. The assessee contested the show-cause notices mainly on three points : i.e. (1) the process carried out by them amounts to manufacture and hence they are justified in taking CENVAT cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirming the demand under Rule 3(5) of the CENVAT Credit Rules when it was an admitted fact that rectifiers have been cleared after programming and burning process. It is his submission that the reasoning given by the adjudicating authority in rejecting the appellant s contention that the process of burning should be considered as process incidental or ancillary to the completion of the manufactured product is fallacious and has likened the burning process to testing and inspection, which would not be so. It is his submission that the judgment relied upon by the learned adjudicating authority in the case of Brakes India Ltd. v. CCE - 2008 (87) RLT 162 (Tri.-Chennai) = 2008 (228) E.L.T. 94 (T) was in a different context wherein the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emphar Drugs Liniments - 1989 (40) E.L.T. 276 (S.C.) and Pahwa Chemical Industries Ltd. v. CCE - 2005 (189) E.L.T. 257 (S.C.) would cover the issue in his favour as regards non-imposition of penalty. He would submit that the impugned order be set aside and the appeal be allowed. The learned counsel also relied upon the following case-laws for the proposition that once Central Excise duty is paid on the final product as manufactured goods and accepted by the authorities, there cannot be any question of seeking reversal of CENVAT Credit paid on the inputs. (i) Vickers Systems International Ltd. v. CCE, Pune - 2008 (229) E.L.T. 298 (Tri.-Mumbai) = 2008 (10) S.T.R. 378 (T) (ii) Crompton Greaves Ltd. v. CCE, Mumbai - 2008 (230) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under Section 2(f) of the Central Excise Act, 1944 and the rules made therein. 5.1 At the outset, we find that the submissions of the learned Counsel that the processes carried out by them i.e. hi-pot test, program, load sharing current sharing voltage test and burn-in test, seems to be not exactly the processes, which would enhance the capacity of the rectifiers imported by the appellant. In the entire submissions made by the appellant before us and before the adjudicating authority, there is no technical write up which would indicate as to how the processes (as recorded hereinabove), are incidental or ancillary to a manufactured product. Before us also, the learned Counsel has only submitted that programming and burning test would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases, it is observed that the duty liability discharged by the appellant therein was in excess of the credit availed by them on the inputs. In the case in hand, it is seen that the credit availed is more and the duty paid is less. 7. At the same time, we also agree with the contentions of the learned Counsel that the penalties imposed by the adjudicating authority are unwarranted. It is seen from the records that the appellant had been filing monthly returns regularly and was intimating the Revenue about the activities carried on, as per his bona fide belief that the rectifiers, which have undergone the test would amount to manufacture, has been discharging the Central Excise duty on final products cleared from his factory. This act of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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