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TMI Blog2018 (7) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... uty paid on various raw materials. 2. During the audit conducted in their factory it was found that during the Financial Year, 2010-12, the appellant had received back certain goods out of the consignments originally cleared by them on payment of duty, from their distributors, who had returned the same under the Invoices/Challans issued by them as the goods were found to be defective/rejected. The appellant availed the credit on the strength of the said documents, which was objected to by the audit. 3. On the above basis proceedings were initiated against the appellant by way of issue of show cause notice dated 30/05/2014, proposing to deny the Cenvat credit on the ground that the distributors/dealers invoices cannot be considered to be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise Rules, allows them to avail the credit in respect of the returned goods. They also submitted that in any case the said Rule 16 Sub-rule 3 allows them to reverse the credit availed by them at the time of subsequent clearance of the defective goods or to pay duty on the final goods cleared after repairs. In the present case, they had repaired the goods and had paid duty equal to the credit availed, thus leading to a Revenue neutral situation. They also contested the demand on the point of time bar. 5. Commissioner, however, did not find favour with the above contention of the appellant and vide his impugned order confirmed the demand of Rs. 90,85,316/- along with confirmation of interest and imposition of penalty of identical amount und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire concept in the provisions of Rule 16 is that if the duty paid goods stand subsequently received by the manufacturer, he would be entitled to avail the credit of the duty originally paid, which would be utilized by him in the subsequent clearances of the goods after repair etc. and he should not be made to pay duty for the second time in respect of the same very goods. Wherever such goods are not repaired and no duty is to be paid subsequently, the entire credit has to be reversed. The idea is that the manufactured goods do not suffer double duty and at the same time the manufacturer, who received the goods back from the purchaser, is not enriched. The entire exercise as provided under Rule 16 is Revenue neutral exercise. 7. In any ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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