TMI Blog2021 (11) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... t Clearly, the goods were not brought back to the factory by the assessee to be re-made , refined , re-conditioned , or for any other reason as contemplated in Rule 16(1) of the Central Excise Rules, 2002. The transactions were devices to illegally avail Cenvat credit. The intent to illegal avail Cenvat credit and escape duty was fully established. There are no merits in the submissions made by the appellants challenging the penalty imposed on them - appeal dismissed. - Excise Appeal No. 87346 of 2013 - A/87085/2021 - Dated:- 3-11-2021 - MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) None for the Appellant Shri Sanjay Hasija, Superintendent, Authorised Representative for the Respondent ORDER This appeal is directed against order in appeal No. P.III/RP/65/2013 dated 08.03.2013 of the Commissioner of Central Excise (Appeals), Pune-III. By the impugned order, the Commissioner (Appeals) has upheld the order in original No. PVIII/CEX/ADJ/09/12-13 dated 31.07.2012 of the Deputy Commissioner of Central Excise, Pune Division - VIII, holding as follows: ORDER (i) I confirm the demand of ₹ 2,44,406/- (₹ 2,37,232/-+ Ed Cess ₹ 4753/-+S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions when the matter got listed on 20.02.2018, 15.03.2019, 03.05.2019, 02.07.2019, 26.07.2019, 22.11.2019, 05.02.2020, 08.04.2021, 06.08.2021, 21.09.2021. So the matter was taken up for hearing and consideration ex-parte. 3.2 I have heard Shri Sanjay Hasija, Superintendent, Authorized Representative for the revenue. 3.3 Learned authorized representative submits that the issue involved in this appeal is no longer res-integra, and has been decided against the appellants in following decisions: Kalyani Forge Limited [2007 (211) E.L.T. 129 (Tri. - Mumbai)] International Tobacco Co Ltd. [2020 (371) ELT 470 (ALL)] Following these decisions the appeal should be dismissed. 4.1 I have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 In a submission made by the appellant on 03.08.2017, they have submitted that they do not dispute the demand of duty and interest but would pray for setting aside the penalty imposed on them, by relying on the following decisions: Hindalco Industries [2007 (215) ELT 547 (T-Mum)] S H Gears Pvt Ltd [2007 (213) ELT 680 (T-Del)] Shimoga Technologies Ltd [2007 (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods on which duty had been paid at the time of removal of such goods and the same are brought back to the factory. The goods are brought back to the factory for being re-made, refined, re-conditioned or for any other reason . The assessee is also required to state the particulars of such receipt of goods in his records. 22. Once the above conditions are fulfilled, the assessee becomes entitled under Rule 16(1) to take Cenvat credit of the duty paid on the returned goods as if such goods are received as inputs under the Cenvat Credit Rules, 2002. The credit shall be utilised by the assessee according to the latter Rules. 23. The purpose of manufacture of goods in this case is sale. Bringing the goods back to the factory after they have been removed for sale does not ordinarily make good business sense. However, at times for some valid reasons, the goods cannot be sold or they are not fit for retention in the market. In such circumstances, the goods may be recalled and brought to the factory. In terms of Rule 16(1), these goods are brought to the factory for being re-made, refined, re-conditioned or for any other reason . After being subjected to said processes, the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e original identity of the manufactured goods completely perishes. Scrapping of goods is done for various purposes, including cannibalisation and extraction of vital or valuable parts of the original goods. 31. Re-made , refined and re-conditioned are processes akin to manufacture; while scrapping involves destruction of the original identity of the goods. Scrapping is neither a species nor in the likeness of re-made , refined or re-conditioned . Consequently, when goods are scrapped, it cannot be stated that the said goods were brought to the factory for being re-made , refined , re-conditioned , or for any other reason provided in Rule 16(1). Scrapping of goods does not fall within the ambit and scope of Rule 16(1). 32. Ordinary business prudence requires that valid commercial reasons must exist for bringing the goods back to the factory. The validity of these reasons is the test of the bona fides of the assessee. These can be ascertained from authentic records, relating to receipts of goods and particulars contained therein. Scrutiny of such records and the contents of the receipts will help determine the bona fides of the assessee to bring back the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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