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TMI Blog2015 (7) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... ari is the Director of PPPL. 2. On 20/7/2002, the factory PPPL was visited by the Jurisdictional Central Excise Officer and at that time, they found the stock of some defective furniture in respect of which they had taken CENVAT Credit of Rs. 51,160/- under Rule 16 of the Central Excise Rules, 2002 claiming that this furniture had earlier been cleared under invoices on payment of duty and the same had been returned from the distributors as defective goods for being re-made or re-manufactured. 2.1. However, on verification of the defective furniture lying in stock with the description of the furniture as given in the invoices, it was found that the description was not matching, as the markings on the furniture indicated that the same had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the return/defective furniture were being cut into pieces, powdered and then were being used for making plastic moulded furniture which was being cleared to M/s. Wim Plast Limited and in respect of such clearances of moulded furniture made out of return furniture, the appellant company were charging re-moulding charges. The departmental officers were of the view that re-moulding charges in an additional consideration and it should be included in the assessable value. The duty demand of Rs. 1,73,427/- for the period from 1/4/2001 to 31/7/2002 is on this basis. 5. In some cases, the appellant company, PPPL were making plastic moulded furniture for their buyers by using the moulds supplied by them free of charges. At that time, they di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt would come to only Rs. 2936/- as against the duty demand of Rs. 7464/- confirmed. With regard to the denial of CENVAT Credit of Rs. 7,17,879/- in respect of the returned furniture under Rule 16 for being re-made, he stated that the department in this regard relies only on the statement dated 23/7/2002 of Shri G.M. Bhandari, Manager of M/s. Wim Plast Limited their distributor; that Shri K.K. Maheshwari, Director of the appellant company has not been confronted with this statement when his statement was recorded; that the statement of Shri Harinder Kumar Garg, Manager of the appellant company had been recorded on 27/08/2002 and he was also not confronted with the statement dated 23/7/2002 of Shri G.M. Bhandari; that in view of this the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G.M. Bhandari it is clear that in past also, the old and used furniture were being sent back under Rule 16 as defective/returned goods for being re-made/re-manufactured and that this is also clear from the fact that on the date of officers' visit to the factory on 20/07/2002 while the appellant had taken CENVAT Credit of Rs. 51,160/- in respect of a consignment of "returned/defective goods" received from the distributor from being re-made, the description of the goods was not matching at all with the description given in the invoices under which the same were claimed to have been originally cleared. Shri Yashpal Sharma, accordingly pleaded that there is no infirmity in the impugned order. 12. We have considered the submissions from bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed furniture received in past and this CENVAT Credit had been taken under Rule 16 of the Central Excise Rules, 2002. The department's contention based on the statement dated 23/7/2002 of Shri G.M. Bhandari is that in past also, they had received only the old and used furniture and not the goods manufactured by the appellant company and cleared on payment of duty. However, it is seen that this statement of Shri G.M. Bhandari is not corroborated any other evidence and not only this, when the statements of Shri K.K. Maheshwari, Director of the appellant company and of Shri Harinder Kumar Garg, Manager of the appellant company were recorded they were also not confronted with this statement. In view of this we hold that merely on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for the goods flowing from the customers to the appellant company and hence the same would be includible in the assessable value. In our view, this contention of the department is not correct and the re-moulding charges are for the expenses incurred for re-processing and re-manufacturing of the goods and the same cannot be treated as consideration for the goods earlier cleared on sal . In view of this, we hold re-moulding charges are not includible in the assessable value and as such the duty demand of Rs. 1,73,427/-along with interest and equivalent penalty is not sustainable. 16. In view of the above discussion, only duty/CENVAT Credit demand of Rs. 54096/- along with interest and equivalent penalty is upheld and the remaining duty/CE ..... X X X X Extracts X X X X X X X X Extracts X X X X
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