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Chennai-III Commissionerate, Chennai Versus M/s. Brakes India Limited and Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Chennai

2016 (5) TMI 1073 - MADRAS HIGH COURT

Whether the input procured solely for the purpose of export by the assessee is entitled to CENVAT Credit when the goods were subjected only to testing and packing - Held that:- the facts of the case show that before the goods were handed over to KTTM, the assessee had undertaken a series of processes. Steel scrap, pig iron and chemicals are received as inputs by the assessee and castings are manufactured. It is only after such a manufacturing activity is undertaken, the goods are sent to one job .....

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be completely forgotten. - This is not a case where the assessee is attempting to claim CENVAT Credit twice over. Whatever credit was claimed by them before they sent it to KTTM Ltd., was actually reversed. Therefore, the credit was still available for the assessee to take. The Tribunal was therefore, right in this regard in holding that testing and packing were part of a series of steps undertaken by the assessee for the manufacture of the goods. - Decided against the revenue - C.M.A.No.3 .....

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reads as under; C.M.A.No.3148 of 2007: Inasmuch as the inputs in question were procured solely for the purpose of export and such inputs were not used in or in relation to the manufacture of the finished goods of the assessee/respondent, whether the Tribunal is correct in allowing the credit of duty with reference to Rule 6 of CENVAT Credit Rules? C.M.A.No.2431 of 2008: 1. Whether the CESTAT is correct in holding that the impugned goods became fully manufactured goods in the premises of the appe .....

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ot satisfied? 2. Heard Mr.A.P.Srinivas, learned Senior Standing Counsel appearing for the appellant Department and Mr.Raghavan Ramabadran, learned counsel appearing for the respondent assessee. 3. The assessee admittedly receives various inputs such as steel scrap, pig iron and chemicals and manufacture castings. Thereafter these castings are sent to job workers for machining operation. While sending them to the job workers, the goods were cleared without payment of duty under job work challans .....

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which can virtually be called the second job worker avails CENVAT Credit and do some painting. Thereafter they send the goods to the assessee again on payment of duty. The value adopted at that time by KTTM Ltd was the initial value adopted by the assessee plus the painting charges. This duty paid invoice is handed over by KTTM to the assessee and the assessee takes CENVAT Credit. The assessee thereafter does testing, packing of goods and clears the same for export under bond without payment of .....

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d packing and claimed CENVAT Credit. 5. However a show cause notice dated 1.7.2003 was issued proposing to disallow the CENVAT Credit in respect of the 2nd case and this resulted in an order in original dated 29.8.2003 dropping the proposals. 6. However, another show cause notice dated 28.10.2004 was issued. During the pendency of this second show cause notice in respect of certain other items, the Department filed an appeal against the order in original dated 29.8.2003 dropping further proceedi .....

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.2007 holding that the testing and packing done by the assessee were part of a series of processes undertaken both for the manufacture of the finished product. As against the common order passed in both these appeals, the department has come up with only a single appeal in C.M.A.No.3148 of 2007. 9. Likewise, another show cause notice dated 7.11.2015 was issued proposing to reverse the CENVAT Credit on the ground that the assessee received inputs upon payment of duty from KTTM Limited and took CE .....

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al No.232 of 2005, the Department has chosen to file one single appeal in C.M.A.No.3148 of 2007. But this is not possible for the reason that those two appeals arose out of different show cause notices and different orders in original. Let us keep this aside for a moment and test whether the contentions of the Department are correct or not? 11. We have already extracted the susbtantial questions of law raised in C.M.A.No.3148 of 2007. These questions revolve around the issue as to whether the in .....

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