9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 768 - AT - Central ExciseCENVAT Credit - whether the appellant is entitled to take Cenvat credit on the rejected goods received by them from their customers which were dismantled by them and part thereof used by them in manufacture of new product or not - Held that - The provisions of Rule 16 (1) of the Central Excise Rules 2002 are relevant for availment of Cenvat credit thereon - assessee is entitled to take Cenvat credit which are duty paid. If the said goods are being remake, revision, recondition or for any other reason the assessee is required to record such receipts in their records and is entitled to take Cenvat credit on duty paid on such goods on their receipt. Admittedly, in this case the goods which have been received were damaged goods by the appellant have been dismantled and used for manufacturing of new product. Therefore, the appellant satisfied the conditions of Rule 16(1) ibid. Therefore, I hold that appellant is entitled to take Cenvat credit on these rejected goods. The said view has been supported by this Tribunal in the case of International Tobacco Ltd. (2011 (9) TMI 862 - CESTAT NEW DELHI), although that being a stay order. Therefore, I hold that appellant have taken the Cenvat credit correctly. - Impugned order is set aside - Decided in favour of assessee.
Issues: Denial of Cenvat credit on returned goods; Interpretation of Rule 16(1) of the Central Excise Rules, 2002.
Analysis: 1. The appellant appealed against the denial of credit on goods returned as defective/rejected by buyers during 2006-2007 and 2008-2009. The Revenue contended that as per Rule 16(1) of the Central Excise Rules, 2002, rejected goods should be sent back after repairs/rectification, failing which the Cenvat credit taken on such goods should be reversed. A show cause notice was issued, leading to denial of credit, interest, and penalty on the appellant. 2. The appellant argued that the rejected goods received were not reusable, so they dismantled them and used the parts in manufacturing new goods, justifying the Cenvat credit. They cited the case of International Tobacco Ltd. v. C.C.E & S.T. to support their position. They also claimed that the extended period of limitation should not apply as they had recorded the return of damaged goods in statutory records. 3. The Revenue opposed the appellant's argument, stating that the dismantled goods were not recorded in the stock register, justifying the invocation of the extended period of limitation. They contested the relevance of the case of International Tobacco Ltd. as it was a stay order. 4. The Tribunal analyzed Rule 16(1) of the Central Excise Rules, 2002, which allows Cenvat credit on duty-paid goods brought for re-making, refining, or re-conditioning. As the appellant had received damaged goods, dismantled them, and used the parts in manufacturing new products, they satisfied the conditions of Rule 16(1). The Tribunal held that the appellant was entitled to take Cenvat credit on the rejected goods, aligning with the decision in the case of International Tobacco Ltd. 5. Consequently, the Tribunal set aside the impugned order, allowing the appeals with any necessary consequential relief.
|
