2017 (3) TMI 1004 - AT - Central Excise

CENVAT credit - rule 16 - CVD - whether the Appellants are eligible for CENVAT Credit of CVD paid on the manufactured goods cleared initially without payment of duty under bond for export? - Held that - as per rule 16, the goods which were cleared and brought back to the factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall be eligible to take credit as if the such goods are received as input under CCR 2004 - The SCN proposed to deny the credit on the ground that it is their finished goods and CENVAT Credit Rules 2004 does not permit credit on the finished goods - there is no substance in the said allegation and confirmation by the authorities below inasmuch as in the Rule itself it is made clear that the goods which were initially cleared on payment of duty on its receipt be considered as input and accordingly the CENVAT Credit would be admissible as if it is an input under CCR, 2004 - appellant is eligible for credit on CVD - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
- Eligibility for CENVAT Credit on goods re-imported after initial export for exhibition purposes.

Analysis:
The appeal was filed against an order passed by the Commissioner (Appeals) regarding the denial of CENVAT Credit on goods re-imported after being initially exported for exhibition purposes. The Appellants exported Standup and Zipped Pouch making Machine under bond for exhibition, later re-imported the goods, paid CVD, and availed CENVAT Credit under Rule 16 of Central Excise Rules 2002. A Show Cause Notice was issued, denying credit on the grounds that the machine was a final product and not eligible for credit. The demand was confirmed, and a penalty was imposed. The Appellants contended that CENVAT Credit was admissible under Rule 16, citing a Tribunal judgment. The Revenue upheld the Commissioner's findings.

The key issue for determination was the eligibility of the Appellants for CENVAT Credit on the CVD paid for goods initially cleared without duty for export. Rule 16 of Central Excise Rules 2002 allows credit on goods brought back to the factory for re-making, refining, or other reasons. The Rule treats such goods as inputs for credit purposes. The Show Cause Notice argued against credit for finished goods, but the Tribunal found no merit in this argument. The Rule explicitly considers initially cleared goods, upon re-importation for any reason, as inputs eligible for CENVAT Credit. The Tribunal concluded that the Appellants were entitled to the credit of CVD paid on the re-imported goods.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal with any consequential relief as per law. The judgment clarified that goods initially cleared and brought back for re-making or other reasons are considered inputs under CENVAT Credit Rules, making the Appellants eligible for the credit of CVD paid on re-imported goods.