2016 (4) TMI 775

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..... by the appellant. 2. The issue involved in the present case is that the appellant is engaged in the manufacture of plastic containers, plastic bottles, plastic cap and plastic plugs etc. falling under Chapter 39 of the Central Excise Tariff Act, 1985. At times the appellants also purchase these products from the market and after bringing the said goods they are availing the Cenvat Credit on them and selling the said bought out bottles along with the caps which is manufactured by them on payment of duty on the transaction value. The show cause notices were issued proposing the disallowance of the Cenvat Credit availed on the bought out plastic bottles on the ground that the appellant have not carried out any manufacturing activity and they .....

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..... t goods without carrying out any manufacturing activity, therefore for the purpose of trading activity, Cenvat credit is not allowed. 5. I have carefully considered the submissions made by both the sides. I find that the appellant is registered manufacturer and discharging excise duty in respect of their manufactured goods. In some cases the appellant manufacturer purchase the plastic bottles from outside and brought into factory and after manufacturing the caps and plugs for the said bottles sold the bottles along with caps and plugs. The excise duty on the transaction value on the sale of said bottles along with caps were paid. This sort of transaction is permissible in terms of Rule 16 of Central Excise Rules, 2002, which reads as under .....

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..... ods brought in the factory for being re-made, refined, re-conditioned or for any other purpose and cleared thereafter, the Cenvat credit is allowed on the purchase of the duty paid goods subject to condition that the excise duty is paid on the reissue of that goods. In case of activity does not amount to manufacture, the duty to be paid should be equal to the Cenvat Credit amount and if activity amounts to manufacture, the duty has to be paid on the transaction value of the goods. In the present case, the appellant have availed credit on receipt of the goods and at the time clearance of goods, since the activity does not amount to manufacture, the excise duty is required to be paid should not be less than the Cenvat credit availed. The quan .....

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