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2016 (7) TMI 1106 - CESTAT HYDERABAD

2016 (7) TMI 1106 - CESTAT HYDERABAD - 2016 (337) E.L.T. 438 (Tri. - Hyd.) - Cenvat Credit on returned goods - activity of bringing the cement from Mattampally unit to the appellant unit - claim denied on the goods as not inputs but finished goods - Held that:- Manufacturer can take credit of duty paid on the goods by treating them as inputs. It is seen from the above rule that if goods are brought for any other reason also, the manufacturer is entitled to take credit as if the goods are inputs. .....

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. The goods if brought for being re-made, refined, reconditioned or for any other reason , the rule would apply. Thus, do not find that there is contravention of any of the provisions of Cenvat Credit Rule, 2004. The activity falls within the ambit of Rule 16 of Central Excise Rules, 2002. On such score, the demand of interest and imposition of penalty is unsustainable - Decided in favour of assessee. - Appeal No. E/27874/2013 - Final Order No. A/30205/2016 - Dated:- 15-3-2016 - Ms. Sulekha Beev .....

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as a railway sliding facility. This unit received an order for supply of 43 grade cement with ISI Mark-The appellant received 43 grade cement from Mattampally factory and marked it with ISI mark and took credit of duty paid on the cement as input under Rule 16 of Central Excise Rules. While clearing the goods the entire credit was utilized. The department entertained the view that as cement is removed from Mattampally unit to Kadimpathavaram unit, the appellant cannot take credit on these goods .....

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appellants was that as per Rule 16 of Central Excise Rules, 2002, a manufacturer can receive duty paid goods into the factory for being remade, refined, reconditioned or for any other reason and after stating the particulars of such receipt, the manufacturer is entitled to take Cenvat credit of duty paid as if such goods are received as input under the Cenvat Credit Rule, 2004. In the impugned order, the Commissioner (Appeals) has partly accepted this contention. The observation is as under. Th .....

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ailed on the cement received from Mattampally unit has been utilized towards payment of duty by the appellant while clearing the cement from Kondapally unit and it is pertinent to mention that it is not the case that the adjudicating authority had questioned the utilization of CENVAT credit towards payment of duty on clearance of cement from Kondapally. Thus, from the above, the dispute is with regard to the availment of CENVAT credit on the duty paid cement received from the Mattampally Unit. T .....

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refore is liable to pay interest upon the irregular credit availed by them. The penalty of ₹ 6,00,000/- imposed by the original authority was reduced to ₹ 2,00,000/-. The appellants are thus before the tribunal. 5. On behalf of the appellant, the learned counsel Shri V.J.Shankaram submitted that there was no procedural infraction committed by the appellant. That appellant is well within the statutory Rule 16 to receive duty paid goods for any other reason and dispatch them to custome .....

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4) ELT -365(Tri.Ahmd) 6. Against this, the learned AR reiterated the findings in the impugned order. He submitted that the goods/cement when brought into appellant unit from Mattampally unit is finished goods. They are not inputs and therefore credit is not admissible. That Commissioner (Appeals) has rightly held the situation to be revenue neutral. That as these goods were not inputs, there was violation of Cenvat Credit Rules and therefore, the appellants are liable to pay interest and the pen .....

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the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules. (2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determin .....

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