TMI Blog2018 (3) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal No. E/715/2008 - Final Order No. A/30196/2018 - Dated:- 1-2-2018 - Mr. M.V. Ravindran, Member (Judicial) And Mr. Madhu Mohan Damodhar, Member (Technical) Shri N.V. Subrahmanya, (AR) for the Appellant Shri G. Prahlad, Advocate for the Respondent ORDER [ Order Per : M. V. Ravindran ] This appeal is filed by the Revenue against Order-in-Original No. 01/2008 CE dated 18.03.2008. 2. Heard both sides and perused the records. 3. On perusal of records, it transpires that the issue is regarding the demand of an amount equivalent to 8% or 10% of the value of the exempted goods cleared by the appellant having taken CENVAT credit on common inputs and input services. 4. We find no merits in the case of Revenue as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,02,938/-, it is seen that the assessee have imported duty free inputs under Notification No. 39/96-Cus, dated 23.07.96 required for execution of contracts issued by Defence Machinery Design Establishment (DMDE). Apart from supplies made to DMDE, the assessee have also cleared finished goods to DRDL, Mazgon Docks, Garden Reach Ship Builders Ltd., without payment of duty in terms of Notification No. 64/95 CE dated 16.03.95. The details of imports and consumption of inputs vis-`-vis the clearances of finished products are available in Annexure 2 of the notice. The excess quantities of inputs consumed as against the duty free imports were from out of the duty paid inputs on which CENVAT was availed by the assessee. On reconciliation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts received by him for used in, or in relation to the manufacture of final products. It is the case of the Department that the inputs used in the R D cannot be considered as used in or in relation to manufacture of final products as they have been said to be used for testing purpose only and will become scrap after usage in R D and at no point of time used the same in the production of finished goods. The dispute is settled if one were to decide whether usage of inputs in R D can be brought within the ambit of usage in or in relation to manufacture of final products. The usage of words in relation to the manufacture after the words in is with the intention of widening the scope of usage of inputs. By the usage of these words, it is the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnection reference may be made to 76 Corpus Juris Secundum at pages 620 and 621 where it is stated that the term relate is also defined as meaning to bring into association or connection with. It has been clearly mentioned that relating to has been held to be equivalent to or synonymous with as to concerning with and pertaining to . The expression pertaining to is an expression of expansion and not of contraction. (para 48). 25. In this view of the matter, I am of the firm opinion that so far as inputs used in trial stages of production, the same are to be as used in relation to the manufacture of finished goods and the denial of CENVAT credit is not proper and legal. Reliance is also placed on the following case laws: i) 1982 (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Range Superintendent has not taken into account in the SCN. Again, the assessee has not availed any CENVAT in respect of items like MTO, Inks, Silver salts etc. As they are local purchases. I also find that the show cause notice, the consumption of SPC Wire, NPC Wire, Nickel, Silver of 2126.765 Kgs has been compared with the consumption of Copper of 4586.40 Kg to arrive at a conclusion that consumption of material in the accounts separately maintained is far below the actual consumption. Clearly, such a conclusion is erroneous, to say the least. In this view of the effective rebuttal, the allegation in the SCN for demand of ₹ 29,88,867/-, is not sustainable. Held accordingly. 5. It can be seen from the above reproduced findings, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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