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TMI Blog2017 (10) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... and are engaged in the manufacture of various types of polymers including Acrylonitrile Butadiene Styrene (ABS). The dispute in the present case is pertaining to the period March, 2008 to April, 2010. During this period customers of the BEPL returned certain quantity of ABS for various reasons to Abu Road factory in Rajasthan. Out of total quantity of 1988 MT of ABS returned, 1883 MT were received back from M/s. Jagruti Resins Pvt. Ltd. (JRPL), a major authorised dealer of BEPL. Upon receipt of ABS, M/s. BEPL availed cenvat credit amount to Rs. 4,20,27,336/- on the total quantity of 1551 MT received from M/s. JRPL and others. Such returned goods were used to manufacture ABS by mixing the same with other basic raw materials. At the time of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner, Jaipur II relating to return of goods under Rule 16 of Central Excise Rules, 2002. (ii) After reprocessing of the returned goods, no new commodity has come into existence as Tariff Item of both returned goods as well as the emerged goods are one and the same. Accordingly, the Commissioner has held that at the time of clearing of reprocessed goods, M/s. BEPL was required to reverse the cenvat credit availed and not pay the duty at the prevalent rate at the time of removal. 6. The relevant Rule 16 of the Central Excise Rules, 2002 is reproduced below for ready reference: "RULE 16. Credit of duty on goods brought to the factory. - (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubjected to, amounts to manufacture, the manufacturer is required to pay excise duty at the rate applicable on the date of removal. 8. There is no dispute of the fact that BEPL has mixed the returned ABS along with other virgin raw materials to remanufacture ABS. This fact has been confirmed by the statement of employees of BEPL recorded during investigation. It is also seen that BEPL has maintained records of receipt of ABS returned to the factory. The reprocessing has resulted once again in ABS, which, no doubt, is falling in the same CETH as the goods returned to the factory. However, from the process carried out in the factory, it is very clear that the same amounts to process of manufacture. Hence, Commissioner was in error to take a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods into the vehicles and have mentioned the actual truck numbers. Accordingly, they asserted that M/s. BEPL has actually received the returned goods and were entitled to such cenvat credit. 11. On perusal of the record of the goods, we find that 436 MT of goods were originally cleared by M/s. BEPL to M/s. JRPL which were subsequently claimed to be returned. 40 invoices which accompanied the alleged returned goods were originally issued by M/s. BEPL at the time of initial clearance. At the time of return, GRs were issued by the transporter and the same are said to have accompanied the goods. The vehicle numbers indicated in such GRs indicated the vehicles through which such goods have been transported. But upon investigation by the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds cannot be considered as received by M/s. BEPL in the light of evidence regarding vehicle numbers / GRs. Further, we find nothing on record to indicate that Shri Arvind K Doshi, CEO of M/s. JRPL was instrumental in such activity. Hence, there is no justification for imposing penalty on Shri Doshi, and we set aside the same. 14. To conclude the above discussion, we order as below: i) We upheld the disallowance of Cenvat credit amounting to Rs. 1,22,98,442/- along with applicable interest and penalty equal to such cenvat credit. (ii) Penalty imposed on Shri Arvind K Doshi is set aside. iii) Demand of duty amounting to Rs. 2,98,20,913/- along with interest and penalty set aside. 15. Appeal is partially allowed in the above terms. (Pron ..... X X X X Extracts X X X X X X X X Extracts X X X X
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