2014 (3) TMI 708 - AT - Central Excise

Duty demand - Revenue contends that as per Rule 16 of the Central Excise Rules, after carrying out the repair work, appellant is required to pay appropriate duty or pay duty equivalent to the CENVAT credit taken - Held that - statement of the General Manager of the appellant is on record who stated that the appellant has undertaken the process of annealing, drawing and pickling, which also does not amount to manufacture. It is also stated by the appellant that they have not taken the CENVAT credit on these goods when they received for repair. In these circumstances, they are not required to pay any duty or required to reverse the credit taken, as they have not taken CENVAT credit. These facts are on record and not rebutted by the revenue. Mere presumption that goods received for repair has been replaced by another goods without evidence on record is not acceptable. In these circumstances, the statement recorded by the department during the course of investigation is admissible. Therefore, as the appellant has not taken CENVAT credit on the goods received from repair, they are not required to pay duty at the time of clearance after repair - Decided in favour of assessee.

Summary

Issues:
Appeal against confirmed duty, interest, and penalty for clearing goods without payment of duty.

Analysis:
The appellant received duty paid goods for repair but cleared them without paying duty, leading to proceedings based on Rule 16 of the Central Excise Rules. The appellant's obligation was to pay appropriate duty or duty equivalent to CENVAT credit taken after repair work. The impugned demands were confirmed against the appellant.

The appellant did not appear for the appeal, and no adjournment request was made. The matter, dating back to 2004, was taken up for final disposal due to its age.

The revenue argued that the appellant must pay duty as they cleared goods without payment and did not disclose the repair process undertaken, citing Rule 16 of the Central Excise Rules, 2002.

After hearing the revenue, the judge examined the records and noted the General Manager's statement that the repair processes undertaken did not amount to manufacture. The appellant clarified that they did not avail CENVAT credit on the goods received for repair. As there was no evidence to support the presumption that replaced goods were used, the recorded statement during the investigation was deemed admissible. Since the appellant did not claim CENVAT credit, they were not obligated to pay duty upon clearance post-repair.

Consequently, the appeal was allowed, and the impugned order was set aside, granting the appellant consequential relief.