TMI Blog2018 (11) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... red for converting the products into finished states with Appellant No.1 as well has miserably been ignored. Irrespective that the process of said ovenizing and packing may not amount to manufacture but the apparent and admitted fact remains is that Appellant No.1 only had paid the Excise duty while clearing the goods which were received from Appellant No.2 in semi-finished state. Once the Department has accepted the duty on goods, Cenvat Credit ought not to be denied by them irrespective the procedure is not that of the manufacture - The situation stands clarified by the Departments’ own Circular No.911/01/2010 – CX dated 14.01.2010. In the present case, the Cenvat Credit availed is ₹ 2,05,59,139/- against the Central Excise duty of ₹ 2,20,67,060/- on the goods cleared by the Appellant No.1. The duty paid stands more than the credit availed. Seen from this angle also, there is no loss to the Revenue. This has also been overlooked by the adjudicating authority below. Time limitation - intent to evade not present - penalty - Held that:- Even if, the Appellant No.1 was not doing any activity which amounts to manufacture, but he has paid the excise duty while cleari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No.1 are nothing but the finished goods only and as per CCR Appellant No.1 cannot claim Cenvat Credit on these goods. Resultantly, the recovery of the Cenvat Credit of ₹ 2,05,59,139/- availed by appellant No.1 during the period w.e.f. 01.10.2012 to 31.03.2006 was proposed to be recovered alongwith interest at appropriate rate and the proportionate penalty vide show cause notice dated 07.06.2016 alleging the wilful suppression on the part of the appellants. The said demand was confirmed in toto vide the order under challenge. Resultantly, the present appeal. 4. We have heard Mr. Anil Jain and Rahul Tangri, ld. Advocates for the appellants and Shri Upabh Sengraj, ld. DR for the Revenue. 5. It is submitted on behalf of the Appellants that initially Appellant No.1 was the manufacturer of all the impugned products. However, w.e.f. October, 2012, the entire manufacturing set up for all these products except for Flux Cored Wire was leased out to Appellant No.2. Still all these goods require to undergo the process of ovenizing and packing for being the finished products. The said facilities were available in the units of Appellant No.1 as well as Appellant No.2. Due to this t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed alongwith the penalty on Appellant No.1 and even upon Appellant No.3, both being the Directors of the appellants. The appeal is therefore prayed to be dismissed. 8. After hearing both the parties, we are of the opinion as follows:- 8.1 That Appellant No.1 who was initially manufacturing the impugned goods, leased out the entire manufacturing set up of these products to Appellant No.2 w.e.f. 01.10.2012 except for the manufacture of Flux Cord Wire. In addition, Appellant No.1 still retained the mechanism or set-up for converting the semi-finished goods into the finished products by conducting ovenizing and packing thereupon. It is apparent from the record with no apparent objection of the Department that these finished products were being cleared by Appellant No.1 after payment of the excise duty. It is also apparent from the agreement between both the appellants that irrespective plant machinery licenses and brand-name qua the impugned products were allowed to be used by Appellant No.2 but the products manufactured by Appellant No.2 were still allowed to be marketed by Appellant No.1 only under its own brand-name and it was Appellant No.1 from whom the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty paid stands more than the credit availed. Seen from this angle also, there is no loss to the Revenue. This has also been overlooked by the adjudicating authority below. 11. Further, Rule 16 of Central Excise Rules, 2002 comes to the rescue of the Appellant in term thereof; - If any duty paid goods are brought to any factory for being re-made, refined or re-conditioned or for any other reason, then, the assessee can avail the Cenvat Credit thereon. - Further, if the goods are subjected to the process of manufacture, then, at the time of removal, the manufacturer is liable to pay excise duty thereon. - However, if the goods are not subjected to the process of manufacture, then, the assessee is required to reverse the Cenvat Credit availed on the goods at the time of receipt. 12. Tribunal Mumbai in the case of Apollo Tyres Ltd. vs. CCE, Pune - 2011 (272) ELT 84 has held that even if the goods are received in the factory and are cleared as such after storage, the said Rule 16 permits availment of credit at the time of receipt and requires reversal of credit availed at the time of clearance thereof. Since Appellant No.1 has availed the Cenvat Credit on the good ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
