Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (12) TMI 1493 - CESTAT NEW DELHI

2015 (12) TMI 1493 - CESTAT NEW DELHI - 2016 (332) E.L.T. 879 (Tri. - Del.) - Eligibility of CENVAT Credit - returned goods - Credit of duty paid on the vehicles at the time of their initial clearance which were later brought back to the factory due to damage - Held that:- Admitted facts of the case are that the appellants discharged due duty at the time of clearance of vehicle. Due to damage in transit, the said duty paid vehicle is brought back to the factory for being re-made or salvaged to t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t only because it is brought into the factory for being re-made, refined, re-conditioned or for any other reason. We find the scope for which a duty paid vehicle can be brought to the factory is very wide and includes the processes undertaken by the appellants in the present case - When the vehicle is brought back to the factory for the intended purposes as stipulated under Rule 16 (1) the credit of duty paid on such vehicle is available to the appellant. Such vehicles undergo a process of manuf .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

de - Decided in favour of assessee. - Excise Appeal No. 1672 of 2007, 907 of 2008, 186 of 2009, 3182 of 2009 with Stay Application No. 3264 of 2009 and 3184 of 2009 with Stay Application No. 3265 of 2009 and 1356, 2724 and 2725 of 2011 - Dated:- 30-10-2015 - Sulekha Beevi C S, Member (J) And B. Ravichandran, Member (T) For the Appellant : Shri B L Narasimhan, Adv For the Respondent : Shri G R Singh, AR (DR) ORDER Per B Ravichandran These are eight appeals filed by the appellants against various .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n be done at the dealer's end. Such vehicles are received back into the factory of appellant for being re-made/repair. Number of such vehicles is less than 0.5% of the total clearance by the appellant. 3. Prior to July 2001 the appellants were following procedure under Rule 173H/173L of the erstwhile Central Excise Rules, 1944. After the introduction of Central Excise Rules, 2002 the appellant followed procedure under Rule 16. They have availed Cenvat credit of duty paid at the time of initi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Rule 16 (1); (b) the damaged car received into the factory is lost in the process of dismantling and, hence, the vehicle brought into the factory and later cleared are not same. This violates Rule 16 (2) The learned Counsel Shri B.L. Narasimhan submitted that there are serious misapplication of the provisions of Rule 16 by the lower authorities. Wrong inferences were drawn by relying on the definition of inputs as appearing in Cenvat Credit Rules, totally ignoring the deeming provision under Rul .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ose is to remake them into a saleable vehicle. These are not disputed facts; (b) The learned Commissioner in the first order dated 31/03/2007 concluded that the appellants are eligible for credit proportionate to the salvaged parts which were used for further manufacturing. He denied credit attributable to completely damage portion/parts of the vehicle which were not salvaged, but were scrapped. The learned Counsel submitted that such conclusion is beyond any legal provision and it is totally un .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

427 (Tri. - Del). It is clear from provisions of Rule 16 (2) that the said rule recognizes and permits activity amounting to manufacture and as such denying benefit of Rule 16 on the ground that the brought back damaged vehicle and the new product are different will lead to legal absurdity. This will be totally against the language and purpose of Rule 16; (e) The quantification of demand is incorrect as the credit available on salvaged parts which was allowed by the learned. Commissioner in his .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

urt's orders in support of their plea on time bar. 5. The learned AR Shri G.R. Singh reiterated the findings of the lower authorities. He submitted that the totally damaged vehicles cannot be considered as input for the purpose of availing credit of duty. The damaged vehicle cannot be utilized in full as input in the further manufacture of a new vehicle. As such, he pleaded that the credit availed on such vehicles cannot be allowed as they are to be considered as scrap only. 6. We have heard .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilize this credit according to the said rules. (2) If the process to which the goods are subjected before being .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eceive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner". 7. The admitted facts of the case are that the appellants discharged due duty at the time of clearance of vehicle. Due to damage in transit, the said duty paid vehicle is brought back to the factory for being re-made or salvaged to the extent possible. We find that the case of the appellant is clearly c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d, re-conditioned or for any other reason. We find the scope for which a duty paid vehicle can be brought to the factory is very wide and includes the processes undertaken by the appellants in the present case. 8. Rule 16 (2) makes it clear that as to how duty liability of the brought back goods are to be dealt with. If the goods are subjected to a process amounting to manufacture the manufacturer shall pay duty as applicable to any such products manufactured by him. In the present case, the pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rescribe a procedure to restrict the available credit as per law, in the name of removing difficulty in following the provisions of Rule 16 (1) and (2). In fact we find no difficulty in appellant following the said provisions. Apart from this primary objection, we find there is no legal basis at all for apportioning the credit which is entitled to the appellant in terms of Rule 16 (1). It is a fact that only when dismantling the damaged vehicle the usability of various components including engin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version