2006 (12) TMI 1 - AT - Central Excise

Central Excise - Cenvat credit - Credit in respect of duty paid glass received back in damaged condition is allowable

Summary

Issues:
1. Whether the appellants are allowed to take credit for duty paid on glass received back in damaged condition.

Analysis:
The appellants cleared tinted and non-tinted glass on payment of duty in around 9000 trucks per year, with some cases (50-60 trucks) where the glass gets damaged and is returned to the factory. The dispute revolves around whether the appellants can claim credit for duty paid on such damaged glass. The appellants rely on Rule 16 of the Central Excise (No. 2) Rules, 2001, which allows for CENVAT credit on goods returned to the factory for re-making, re-conditioning, or other reasons. They also reference a previous Tribunal decision in Triveni Sheet Glass Works Ltd. Vs. CCE, where it was held that damaged glass falls under the rule allowing for credit. The Tribunal notes that the term 're-made' is used in Rule 16 and, considering the precedent set by the Triveni Sheet Glass case, rules in favor of the appellants, allowing them duty credit on damaged glass received back.

Final Judgment:
After reviewing submissions, case records, and the precedent set by the Triveni Sheet Glass case, the Tribunal concludes that the appellants are entitled to duty credit on damaged glass returned to them. Therefore, the impugned order is set aside, and the appeal is allowed with consequential benefits to the appellants. The order was pronounced in open court on 23.12.2005.