TMI Blog2016 (9) TMI 1096X X X X Extracts X X X X X X X X Extracts X X X X ..... the raw material received free of cost has to be additional consideration over and above the amount received by the appellant towards sale of the finished goods. Admittedly the free raw material would have resulted in the lesser invoice value which does not duly reflect the normal transactional value for excise duty purposes. Demand - lesser payment of duty paid on the cables which were cleared for second time - appellants claimed that these goods were re-manufactured by using additional inputs as untenable - Held that:- the appellants received back the finished goods, did some processing to obtain similar finished goods and cleared to another customer. There is nothing on record to say that the second time clearance was of different goods resulting after a process of manufacture. In terms of Rule 16 (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). In the present case, the appellant is liable to pay the Cenvat credit already availed on return of the said finished goods. Hence, we find no merit in the plea of the appellant against such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside the penalty imposed under the said Rule. - Decided partly in favour of appellant - Excise Appeal No. 192 of 2007 - Final Order No. 53556/2016 - Dated:- 15-9-2016 - Dr. Satish Chandra, President And Shri B. Ravichandran, Member ( Technical ) Shri V. Swaminathan, Advocate for the appellant Shri R.K. Manjhi, Authorized Representative (DR) for the respondent ORDER Per. B. Ravichandran The appeal is against order dated 30/10/2006 of Commissioner of Central Excise, Jaipur I. The appellant are engaged in the manufacture of Telecommunication Grade FRP Rod and Optical Fibre Cables liable to Central Excise Duty. Based on certain verification made by the officers in October 2005, proceedings were initiated against the appellant to recover an amount of ₹ 40,60,963/- towards Central Excise duty not paid and an amount of ₹ 63,32,710/- towards irregular availment of Cenvat credit on returned goods. The show cause notice dated 01/12/2005 issued in this regard was adjudicated and the Commissioner vide the impugned order held that the appellant is liable to pay Central Excise duty as demanded in the notice and imposed penalties under various provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale value to arrive at the transaction value for excise purpose. Regarding additional consideration in the form of free raw material he submitted that the raw material cost has to be added in the final product and hence there is no question of accepting the invoice value which is not reflecting the value of free raw material. 5. The learned AR supported the findings of the Original Authority in respect of confirmed demands. He further submitted that the Cenvat credit of ₹ 63,32,710/- is correctly demanded as the credit availed on returned goods is not legally sustainable in terms of Rule 16 of the Central Excise Rules, 2002. It is clear that the appellants are not undertaking any repair or further processing of the returned goods as they were lying without any further process in their unit. Regarding transfer of capital goods, it was submitted that the same have been removed from the above premises and have not returned back. Hence, the recovery of credit on such goods is justified. 6. We have heard both the sides and examined the appeal records. On the first issue regarding loading of additional consideration with reference to the debit notes issued by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, the appellant is liable to pay the Cenvat credit already availed on return of the said finished goods. Hence, we find no merit in the plea of the appellant against such demand. 9. A demand of ₹ 1,41,332/- is on account of clearance of capital goods on which credit has been availed. The appellants claim that the capital goods were cleared to their own unit and from their it was sent to another unit for maintenance. We find the capital goods are no more available with the appellant for intended use and there is no record of their return after maintenance work. In such situation, the Original Authority is correct in demanding to recover the credit taken on such capital goods. 10. Cenvat credit of ₹ 63,32,710/- was sought to be demanded on the ground of misuse of the provisions of Rule 16 by the appellant. This amount is availed as a credit by the appellant upon return of duty paid final products back to the unit. We note that the denial of such credit is on the ground of alleged motive of the appellant to avail the credit and to keep the goods without clearance in the unit. Past instances were relied upon. Further, the credit taken in terms of Rule 16 (1) was als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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