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CCE & ST, Chennai Versus M/s. Indian Refrigerator Co. Ltd.

2017 (7) TMI 443 - CESTAT CHENNAI

CENVAT credit - removal of defective/rejected/waste components of television receivers - Revenue was of the view that since credit had been availed on inputs the respondents ought to have reversed the credit under Rule 3 (4) of Cenvat Credit Rules, 2002 - scope of SCN - Held that: - assesssee have properly accounted the removal in RG-I register and also in RT-12 returns. The Commissioner (Appeals) has appreciated the facts and found that the SCN has not alleged that the inputs were removed as su .....

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t is unjustified - appeal dismissed - decided against Revenue. - E/434/2006 - 41060/2017 - Dated:- 19-6-2017 - Smt. Sulekha Beevi C.S., Member (Judicial) And Shri V. Padmanabhan, Member (Technical) Shri S. Govindarajan, AC (AR) for the appellant Shri V. Panchanathan, Advocate for the respondent ORDER Per Bench The brief facts of the case are that the respondents are engaged in the manufacture of 'Colour Televisions, Refrigerators and Washing Machines'. They are availing Cenvat credit on .....

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e waste components that are arising during the production. After due process of law, the original authority observed that the show cause notice is silent on the aspect whether the goods cleared are inputs as such or they are partially processed and waste/scrap. As the dispute pertained to facts, he called for verification by the jurisdictional Assistant Commissioner whether the goods removed were inputs as such or whether these were defective goods rejected after entering the production stream. .....

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filed by the department and allowed the appeal filed by the respondents thus, setting aside the duty demand of ₹ 1,06,101/-. Hence the present appeal. 2. On behalf of the department, the Ld. AR Shri S. Govindarajan, AC, reiterated grounds of appeal. He contended that the Commissioner (Appeals) failed to consider the fact that such items were indeed rejects and scrap then relevant entry to that effect would have been made in the production register. In the absence of any entry being made in .....

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ssued by the respondents. He submitted that on perusal of Annexure-A itself, it can be seen that the goods are nothing but waste PCB assemblies, rejected/defective components, broken picture tubes, waste and defective components of television etc. The respondents being manufacturers of television and components of television, during the production of PCB assemblies, some of them become waste due to human error of over soldering of PCB units and sometimes these components gets burned. In that sit .....

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rightly set aside the demand. 4. We have heard the submissions made by both sides. 5. We find in agreement with the arguments put forward by the ld. Counsel for the respondents that they have given in detail how the waste/defective components were generated. The relevant part in the reply to the SCN is as under:- During the course of production of television some of the components are becoming waste during the production such as picture tube, Speakers assembly, Tuners deflection yoke, resistors .....

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e are elaborated above are the production waste and they are sold in the market as waste and that to on payment of duty our sole consideration in this transaction is limited to the invoice price and as allege in the SCN that we should have paid. It is submitted that the production waste which looks a like a input but it cannot be equated with the a fresh and quality inputs because they are failed/burned/broken in the production hence those are declared as waste. It is known fact that in case the .....

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