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TMI Blog2008 (5) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... rakes India Ltd. (BIL), the appellant herein took Cenvat credit of duty paid on hose assembly received from M/s. Witchitra Auto Ltd. (WAL), Ambattur, during 5-2003 to 3-2004. The credit was utilized for removing other goods manufactured by it. The assessee exported the consignments of hose assembly received from WAL. Before the lower authorities the appellant had argued that they had received hose assemblies and before exporting them under bond the same were subjected to processes of testing, inspection and packing. These processes had amounted to manufacture. Therefore, they were eligible for credit of duty paid on hose assemblies. The Rule 13 of erstwhile Central Excise Rules, 1944 and Rule 19 of CER 2001/2002 treated the processes such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd packed goods were exported under bond. It is also submitted that Modvat credit was admissible when inputs were exported under bond. If the appellants had operated as merchant exporter under Rule 18 of erstwhile CER, they would have received as a rebate the duty paid on the goods when they were exported. Credit was available of duty paid on any goods received in the factory for 'any reason' Rule 16(2) of CER 44 provided for availing credit when any goods are cleared from the factory on payment of duty. The Rules could not conceive of all possible situations. It was the policy of the Govt. to relieve the goods exported of all domestic taxes. There was no case for penalty. 5. The ld. Counsel relies on the decision of the South Zonal Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The rules do not bar such inputs also being cleared on payment of duty from the factory. However, the rules do not provide for an assessee taking credit of duty paid on inputs which are not used in the manufacture of final products and are procured solely for export under bond. Such transactions are not intended to be covered by the Cenvat scheme. 8. In the case of Brakes India Ltd., cited by the assessee, most of the manufacturing operations related to the goods exported had been carried out by BIL. The argument that the hose assemblies became marketable only on testing and packing cannot be countenanced. The fact that a merchant exporter getting a rebate of duty paid when he exports similar goods, there should not be any objection to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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