TMI Blog2008 (5) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... hri J.F. Pochkhanwala, Advocate, for the Appellant. Shri Tarun Kumar Govil, Jt. CDR, for the Respondent. [Order per : A.K. Srivastava, Member (T)]. - This appeal has been filed by M/s. Crompton Greaves Limited against Order-in-Original No. 4/KKS/2006-07 dated 8-12-2006 passed by the Commissioner of Central Excise, Mumbai-III. The Commissioner, vide impugned order, has disallowed Cenvat credit of Rs. 6,81,14,176/- for the period from December, 2000 to June, 2001. He also demanded interest on the same and imposed equivalent penalty of Rs. 6,81,14,176/-. 2. Heard both sides and perused the records. 3. The facts of the case are that when the appellants clear transformer-from their factory, they are paying excise duty as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal inputs. The only reason why the same are demanded by the customers and sent as additional spares is because the Electricity Boards cannot afford the luxury of a breakdown in the supply of electricity, and these spare immediately take over the functioning of the transformer as soon as the defective part is replaced. 7. We note that the appellants have availed the Cenvat Credit on the bought out items used in the manufacture of transformer. However, certain bought out items were cleared as spares over and above the ones used in the manufacture of transformers for taking care of any unforeseen break down of the transformer at the customers' end so as to get the transformer functioning in minimal time in case of break down of the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... micals (P) Ltd. v. CCE - 1997 (96) E.L.T. 659 (T). In that case, the assessee took the Modvat credit on the inputs and utilized the same for payment of duty on the final product. The Department contended that the final product was wholly exempt from payment of duty in terms of Notification No. 1/93, and therefore, no Modvat credit is available in terms of Rule 57C. The Department accordingly proceeded to deny, and recover the Modvat credit taken on the inputs. The Tribunal after considering the issue held that the utilization of the Modvat credit for the payment of duty. on the final product, which is treated by the Department as exempt from payment of duty, has to be treated as reversal of the Modvat credit. The relevant portion of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) took the credit of the duty paid on the processed fabric. The processed fabric was then subjected to the processes such as cutting, folding and packing. The credit taken on the processed fabric was utilized for the payment of duty on the packed fabric cleared by the assessee. The Department denied the credit taken on the processed fabric on the ground that the processes undertaken by the assessee did not amount to manufacture. The Tribunal dismissed the Department's appeal on the ground that the duty paid by way of the debit in the Modvat account should be treated as the reversal of the inadmissible credit taken and, therefore, no demand would lie. 13. The following case laws lay down that when the process is held to be not manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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