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M/s. Tipco Industries Limited Versus Commissioner of Central Excise & S.T., Vapi

2015 (10) TMI 2201 - CESTAT AHMEDABAD

Admissibility of cenvat credit - Rejected and returned goods - Held that:- On the basis of audit it was observed that appellant has not followed the procedure and conditions laid down in Rule 16(2) and 16(3) of the Central Excise Rules, 2002. It was also mentioned in the show cause notice that appellant did not maintain any records/ registers for rejected and returned goods as provided under Rule 16 of Central Excise Rules, 2002. However, it is observed from RG 23A Pt.I maintained by the appella .....

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rd that no process was carried out on the rejected goods received by the appellant whereas, the appellant has produced documentary evidence to show that certain process were done which amounts to manufacture and cleared on payment of duty. - CENVAT credit on rejected and returned goods was correctly availed by the appellant. - Decided in favour of assessee. - Appeal No. : E/10555/2013 - ORDER No. A/10944 / 2015 - Dated:- 30-6-2015 - Mr. H.K. Thakur, Honble Member (Technical) For the Petitioner : .....

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on rejection. 2. Shri Vinay Sejpal, (Advocate) appearing on behalf of the appellant argued that appellant is manufacturing Re-enforced Poly-Propylene Plastic Granules and clearing on payment of duty. That in certain cases the goods manufactured and cleared by the appellant on payment of duty are received back as rejected which are separately shown in the cenvat credit account and credit is taken by maintaining separate Section in the CENVAT credit account. That these rejected goods received are .....

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ppellant has not maintained any records for the receipt of rejected goods in the factory as per Rule 16(1) of Central Excise Rules, 2002. It was his case, whether the activity carried out by the appellant amounts to manufacture or not, has been discussed by the first appellate authority, which is beyond the scope of the show cause notice. That no such allegations were made in the show cause notice. Learned Advocate relied upon the following case laws to argue that process of remoulding and addin .....

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2.1 He also relied upon the CBEC Circular No. 15/88-CX.3 dated 10.08.1988 where it is clarified that conversion of LDPE/HDPE moulding powder (granules) into Moulding powder (powder form) would amount to manufacture in the light of note 6 of Chapter 39 of the Schedule to Central Excise Tariff Act, 1985. 3. Shri Govind Jha (AR) appearing on behalf of the Revenue argued that it has not been established that process undertaken by the appellant amounts to manufacture, therefore, appellant was require .....

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d in the show cause notice that appellant did not maintain any records/ registers for rejected and returned goods as provided under Rule 16 of Central Excise Rules, 2002. However, it is observed from RG 23A Pt.I maintained by the appellant that entries have been made in this register regarding receipt of rejected goods in spite of the fact that no record has been specified under Rule 16 to be maintained by an assessee. The documents on the basis of which CENVAT credit is taken is also available .....

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appellant has produced documentary evidence to show that certain process were done which amounts to manufacture and cleared on payment of duty. It is not the case of the Revenue that the documents relied upon by the appellant were fabricated after the date of audit. 5. So far as the issue whether conversion of granules again into PP Granules by adding certain additives amounts to manufacture or not, though this was not the issue in the show cause notice but appellant has relied upon the case law .....

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