TMI Blog2007 (5) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... the period September'02 to March'03 and October'03 to March04 and interest thereon. In the order impugned in Appeal No. E/793/05, the Commissioner, Chennai-III demanded an amount of Rs. 1,12,84,978/- being the credit availed on Saddle Bracket Absorber, Bracket V Stay and Stabilizer Bracket during the period October'03 to September '04. A penalty of Rs. 10,00,000/- was also imposed in the order-in-original. In the Appeal No. E/232/05, the order impugned is of Commissioner (Appeals), who upheld a similar demand of Rs. 47,89,219/- in respect of machined Elsa Bridge relating to the period September'02 to March03, passed in appeal against the order of the original authority who had dropped the proposal to demand the said amount. Commissioner (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xported. 3. The ld. Consultant for the appellants reiterated the grounds stated in the appeal. He cited the case law CCE v. Rolls Prints (Packaging) Ltd. [ (104) E.L.T. 712 (Tri.)} to buttress his claim that testing and packing amounted to manufacture. He submitted that Rule 16 of the Central Excise Rules, 2002 al lowed credit of duty paid on any goods received in a factory. These could be re moved reversing the credit availed if cleared without undertaking any process of manufacture on them. He also referred us to the manual of supplementary instructions issued by the CBEC, which also provided that the facility of export under bond in terms of Notification No. 43/01-C.E. (NT.) was available to non- duty paid goods received and subjected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants were right in taking credit of the duty paid on the goods received from the job worker for the above essential finishing processes. 4. He argued that BIL had the option to export the subject goods under claim for rebate of duty as a merchant manufacturer in which case the benefit claimed as duty credit would have accrued to BIL. He also submitted that in terms of Rule 16 of the Central Excise Rules, the appellants were entitled to take credit of the goods received from the job worker on payment of duty and they could clear the said goods on reversing an amount equal to the credit availed, if it was held that the processes of testing and packing did not amount to manufacture. He also submitted that Notification No. 43/2001-CE. (N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find that the appellants did not procure inputs and export them as such. They undertook major part of the manufacturing activity of casting pig iron/steel scrap into the automotive parts in their factory as well as the finishing processes. The arguments of the appellants that the processes they under took prior to the export of the goods after receipt from the job workers amounted to manufacture as envisaged in clause 2(f) of the Central Excise Act, 1944, carries considerable force. 7. Export goods would be acceptable to the foreign buyer only after the goods are tested for quality. These had to be properly packed for the purpose of export. Therefore, the goods became marketable only after the impugned inputs were tested and packed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise, Jaipur reported in 1998 (97) E.L.T. 310 (Tri.), which is relevant in deciding the dispute: "Manufacture is defined in Section 2(f) of the Act as including any process incidental or ancillary to the completion of the manufactured product and accordingly packaging the commodity Nylon or Polyester Filament yarn in suitable packages for marketing will be covered in the manufacturing process. Goods used in such process of completion will be goods used in the manufacture of such finished products". Going by the above findings of this Tribunal, automotive parts received by BIL had undergone processes incidental to completion of manufacture before they were exported. We also find that the disputed processes under taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es did not amount to manufacture. Therefore, the credit of duty they took is a benefit legitimately due to them, in the view we have taken of the processes undertaken by the assessee. 9. We hold that the impugned goods became fully manufactured goods only in the premises of the appellants before they were exported and that the impugned order demanding Cenvat credit availed by the appellants, interest thereon and imposing penalties on them are not sustainable. We also observe that the department had allowed the assessee to export the goods under bond as per procedure laid down in Notification No. 42/01-C.E. (N.T.) applicable to manufactured goods. Assessee was allowed to avail credit of duty paid on materials used to pack the export goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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