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2015 (10) TMI 421 - CESTAT NEW DELHI

2015 (10) TMI 421 - CESTAT NEW DELHI - TMI - CENVAT Credit - return of goods - Rule 16 of the Central Excise Rules - transformers have not been returned under the original or duplicate copy of the invoice had been returned only under challans - Held that:- When the show cause notice itself mentions, the goods in respect of which duty has been demanded, as non-excisable goods, I fail to understand as to on what basis the duty had been demanded, when the difference between ER-1 return figure and b .....

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is no reversal of Cenvat credit, but still these parts having been sold are reflected in the balance sheet. I find that no finding has been given by the Commissioner (Appeals) on this plea and he has simply confirmed the demand stating that the repair activity being excisable, the duty should have been paid on this amount also, while this is not the allegation in the show cause notice. Moreover in any case, the finding that repair of transformers amounts to manufacture is totally wrong finding i .....

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hra, DR ORDER Per: Ashok Jindal: The facts leading to these appeals and stay applications are, in brief, as under. 1.1 The appellants are manufacturers of transformers. Beside this, they also undertake repair of the transformers returned to them by their customers for this purpose. The appellant had cleared certain number of transformers on payment of duty. However, during the period from August 2001 to February 2002 some of the transformers were returned by their customers for repairs, but the .....

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- under Rule 16, in respect of the transformers returned without the original invoices under which the same had been cleared, is irregular. 1.2 In course of scrutiny of the ER-1 return for 2001-2002 the departmental officers found that while the figures of non-excisable goods cleared during that year was ₹ 59,57,159/-, in their balance sheet they have shown the sale value of such goods as ₹ 84,11,772/- and accordingly the department has demanded duty @ 16% on the differential amount .....

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eld vide order-in-appeal dated 02/2/10. The appellants filed appeals to Tribunal against the Commissioner (Appeals)'s order and the Tribunal vide final order dated 23/7/12 remanded the matter to Commissioner (Appeals) for denovo decision. In denovo proceedings the Commissioner (Appeals) again upheld the Joint Commissioner's order vide order-in-appeal dated 15/1/13 against which these appeals have been filed alongwith stay applications. 2. Heard both the sides in respect of stay applicati .....

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, but had been returned under challans, the transformers returned could be linked to the triplicate copies of the invoices on the basis of CT number, that the appellants, therefore, have correctly taken the Cenvat credit on the basis of triplicate copies, that in this regard he relies upon the Mysore Commissionerate's Trade notice No. 21/2004 dated 11/05/2004 and also the judgment of the Tribunal in the case of BAPL Industries Ltd. vs. CCE, Coimbatore reported in 2006 (198) E.L.T. 587 (Tri. .....

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is not non-Cenvat credit availed part, no amount is paid, that the sale of all the parts used in repairs, whether Cenvat credit availed or not are reflected in the balance sheet, that the difference between the ER-1 return figure of sale of such parts and the balance sheet figure of sale of such parts is only for the reason that the parts used in repair in respect of which no Cenvat credit has been availed and for this reason no amount was paid at the time of their clearance with repaired transf .....

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arned DR opposed the stay applications by reiterating the findings of the Commissioner (Appeals) and pleaded that as regards the availment of Cenvat credit in respect of the transformers returned for repair, the appellant were not in a position to produce even the duplicate or triplicate copies bearing the CT numbers and hence the Cenvat credit of ₹ 5,31,031/- has been correctly denied, that as regards the duty demand of ₹ 3,92,578/-, since the activity of repair of transformer amoun .....

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emand under Rule 16 of the Central Excise Rules in respect of transformers returned to the appellant for repairs. There is no dispute that these transformers have not been returned under the original or duplicate copy of the invoice had been returned only under challans. The appellant's plea is that even though the transformers have not been received under original or duplicate copy of the invoices, the same can be linked with the invoices under which the same had been cleared on the basis o .....

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had been taken. I find that whatever credit has been taken by the appellant the same has been reversed at the time of the clearance of the repaired goods. Moreover, no credit was taken of the ports used in repair. Therefore, the credit can't be denied. In these circumstances, I hold that the appellant has correctly taken the credit. 7. As regards the duty demand of ₹ 3,92,578/-, the basis of this demand, as mentioned in the show cause notice is reproduced below:- Scrutiny of the sale .....

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rds it was observed that the said party had another unit at B-40, Jhilmil Industrial Area, Delhi, but the said party could not produce any records/data for the same. Therefore the Central Excise duty amounting to ₹ 3,92,578/- on a value of ₹ 24,53,613/- is demandable from the party as they failed to account for as value of excisable goods and have contravened the provisions of Rule 4,6,8,10,11 and 12 of Central Excise (No. 2) Rules, 2001 and the same to recoverable under Section 11 ( .....

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