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C.C.E. & S.T. -Vapi Versus M/s Castrol India Limited

2016 (3) TMI 66 - CESTAT AHMEDABAD

Reversal of credit equal to the cenvat credit availed on the input - damaged/rejected goods cleared - Respondents are alleged to have failed to pay duty equal to the duty taken as credit on the inputs cleared as damaged/rejected prior to use in manufacture of final product as prescribed - Held that:- Inputs sold as scrap in terms of Section 4 of the Act on transaction value has originated from the manufacturing process followed in the petroleum industry. Once the input is rejected during manufac .....

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y them. The dept. has not proved that the appellants have received more value from the buyer of rejected barrels than the value shown in the invoices for charging Central Excise duty. It is also not the case that the rejected barrels are recycled & purchased again by the appellants. In view of above, it seems to be more assumption & presumption as pleaded by the appellants, based upon which show cause notice issued & confirmed by the lower adjudicating authority since the dept. has not found any .....

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23-2-2016 - Mr. Justice G. Raghuram, Hon ble President And Mr. P.M, Saleem, Hon ble Member (Technical) For the Appellant : Shri Alok Srivastava, (AR) For the Respondent : Shri H. M. Gandhi, Manager ORDER Per P. M. Saleem This an appeal filed by Revenue, aggrieved by the impugned order-in-appeal of the Commissioner (Appeals) dated 10.09.2008. The brief facts of the case are that the M/s. Castrol India Limited, the Respondents herein, cleared 20934 nos. of inputs i.e. M.S. Drums/plastic barrels & .....

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al product as prescribed. The Respondents availed CENVAT credit to the tune of ₹ 23,30,388/- on the purchase of total 20934 Nos. of said inputs and paid Central Excise duty to the tune of ₹ 8,92,921/- on as such clearance of the damaged/rejected barrels and drums whereas it appeared that they have to pay an amount equal to the credit availed in respect of such inputs i.e. ₹ 23,30,388/-. Thus, the Respondents have short paid/reversed the duty of ₹ 14,37,467/-. Therefore a .....

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r the Respondents reiterates their submissions made before the Commissioner (Appeals), as mentioned at Para 3 of the impugned order-in-appeal. 4. On perusal of the records and careful consideration of the arguments of both sides, we find that the Commissioner (Appeals), held as follows in the impugned order-in-appeal:- 6.1. The adj. authority held that as per rule 3(5) of Cenvat Credit Rules, 2004 the appellants were required to reverse an amount equal to credit availed in respect of M.S. Drums .....

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ice by reversing the cenvat credit availed on / attributable to the quantity rejected. There is no dispute between appellants and department on the rejected inputs at this stage. 2. The second stage of rejection is as under :- (i) As per standard manufacturing and quality policy after filling first four barrels of each product pack are kept separately for QC testing of finished goods. The quality dept then checking of these four barrels. If the results are as per the specifications then the prod .....

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oods and the damaged barrels cleared as scrap barrels on payment of duty on their selling price. 6.2. From the above stages of rejection of inputs as explained by the appellants as well as noted by the adj. authority it is abundantly clear that inputs sold as scrap in terms of Section 4 of the Act on transaction value has originated from the manufacturing process followed in the petroleum industry. Once the input is rejected during manufacturing process and sold at the transaction value under Se .....

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