9911796707
TMI Blog2005 (2) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... MODVAT Credit of the duty paid on inputs; that one of the inputs received by them is M.S. steel tubes; that the said tubes are reduced and then cut to required sizes and subjected to the process of debarring and smoothing of edges and surfaces and, thereafter, the process of electro plating is carried out; that after carrying out all these processes, the tubes are exported to foreign country; that the Department has denied the MODVAT Credit taken by them in respect of M.S. tubes on the ground that as no manufacturing process has been carried out, they are not eligible to avail of the MODVAT Credit; that the view taken by the Revenue is contrary to the Instructions issued by the Board, vide Circular No. 283/117/1996-C.X., dated 31-12-1996 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the goods manufactured by them back from their customers for the purpose of re-processing the same; that the assessee had taken CENVAT Credit of the duty initially paid by them at the time of clearance of those goods; that, subsequently, these products had been cleared by the assessee as scrap and the payment of duty had been made on the reduced value of the scrap; that, as per the provisions of Rule 16(2) of the CENVAT Rules, 2002 if the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the Cenvat credit taken under sub-rule (1) of Rule 16; that the Commissioner (Appeals), in the impugned Order, has wrongly allowed the assessee to pay the duty only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent from goods does not mean that the scrap has occurred as a result of manufacturing process. No one undertakes the process of manufacture to make the scrap. We, therefore, do not agree with the findings of the Commissioner (Appeals) in this regard and set aside the same and hold that assessee is liable to reverse the entire credit taken by them at the time of receipt of the returned goods. 6. The learned SDR has also mentioned that the assessee had also availed of the CENVAT Credit on the strength of invoice No. 114, dated 29-9-2001 in which description of the goods was shown as "dismantling and re-erection including consumable"; that this shows that no new goods were received by the assessee on which the credit can be availed of; that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... After considering the submissions of both sides, we find force in the submissions of the learned SDR that as no goods have been received by the assessee, the question of availing of Modvat credit does not arise. The Modvat credit is available either on the inputs or on the capital goods. The charges paid towards erection of the plant and dismantling are neither inputs nor capital goods. In the case of Eveready Industries India Ltd. v. CCE, Allahabad (supra), the goods were received by the assessees and the issue involved was whether packing or forwarding charges should have been included in the assessable vable of the inputs. In the present matter, as observed by us, no goods have been received. Further, the Division Bench of the Tribunal h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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