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TMI Blog2018 (12) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... e for credit. According to department Rule 16(1) of Central Excise Rules 2002 is to be applied and therefore the goods purchased from other sister concern when being packed, the activity did not amount to manufacture as per Chapter Note to third schedule to CEA 1944. Such goods do not qualify as inputs and therefore the credit availed is not eligible. Show cause notices were issued proposing to demand the wrongly availed credit on inputs for different periods from 2013 - 14 to 2014 - 15 and May 2015 to December 2015. After due process of law, the original authority confirmed the demand of Rs. 16,66,248/- and Rs. 9,74,075/- for the respective periods along with interest and also imposed penalties. In appeal, Commissioner (Appeals) upheld the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 (339) ELT 334 c. Commissioner of Central Excise Vs. Prime Healthcare Products - 2011 (272) ELT 54 (Guj.) d. G.S. Enterprises Vs. Commissioner of Central Excise, Jaipur - 2014 (313) ELT 340 (Tri. Del.) 3. The ld. AR Shri L. Nandakumar supported the findings in the impugned order. He argued that since the goods were purchased from other manufacturers and brought into the factory for repacking, such unpacking or repacking does not amount to manufacture and therefore as per Rule 16(1) and (2), the appellants are not eligible for credit. 4. Heard both sides. 5. The allegation is that the appellants are not eligible for credit on the fireworks purchased from their sister concern / outside manufacturers. It is not disputed that the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme to avoid cascading effect of tax suffered on input. In that stream whatever input is going into final product either directly or indirectly, duty suffered on that input should be set off and only on value addition duty is levied. In the present case the playing cards even though it does not participate directly in the manufacture of final product i.e. spray guns but undisputedly the same is purchased by the appellant and expenditure of the same stands absorbed in the cost of the final product which ultimately suffered the duty as a whole, therefore in my considered view the playing cards which is supplied along with final product should be eligible for input credit. The definition of input also clearly suggests that the input need no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 16 does not appear to be proper in the given set of facts of the case. Rule 16 reads as under:- "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 factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules. (2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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