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TMI Blog2010 (10) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... s i.e. Rectifier unit and it was also observed by the Audit party on scrutiny of invoices for removals that the assessee had cleared the rectifier units as rectifier modules and has discharged the duty liability upon the transaction value. It appeared to the Audit party that the amount of credit taken of the duty paid on the rectifiers imported was more and the duty paid on clearance of rectifier modules was less. It was also observed by the Audit party that the processes, which were carried out by the appellant on the rectifiers, would not amount to manufacture and does not alter the nature, use and outlook of the rectifier. Coming to such a conclusion, the Audit party directed the appellant to reverse the differential amount of credit tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for registration as a manufacturing unit and started to discharge the duty liability on the said product cleared by them as manufactured product. It is his submission that it is not now open to Revenue to allege that the process does not amount to manufacture. It is his submission that the burning process, which is carried out by the appellant, will be amounting to manufacture and is 'incidental' or 'ancillary' to manufactured product. It is also his submission that the adjudicating authority has erred in confirming the demand under Rule 3(5) of the CENVAT Credit Rules when it was an admitted fact that rectifiers have been cleared after programming and burning process. It is his submission that the reasoning given by the adjudicating auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant has been filing monthly returns with the authorities and submit all the details as required under the law. It is his submission that there cannot be any suppression of facts or mis-statement, as the appellant has been clearing the goods on payment of duty and also filing the returns wherein they had indicated the availment of CENVAT Credit on the inputs and also utilization of the same for discharge of duty liability. He would submit that the judgment of the Hon'ble Supreme Court in the case of CCE v. Chemphar Drugs & Liniments - 1989 (40) E.L.T. 276 (S.C.) and Pahwa Chemical Industries Ltd. v. CCE - 2005 (189) E.L.T. 257 (S.C.) would cover the issue in his favour as regards non-imposition of penalty. He would submit that the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the process of mere lamination or metallization of duty paid film was considered as not amounting to manufacture, as there is no distinct product which come into existence. 5. We have carefully considered the submissions made at length by both sides and perused the records. The issue to be decided in this case is whether the rectifier units cleared by the assessee has to be treated as removal "as such" as and required to reverse the credit availed of imported rectifiers or the said product is to be considered as manufactured product under Section 2(f) of the Central Excise Act, 1944 and the rules made therein. 5.1 At the outset, we find that the submissions of the learned Counsel that the processes carried out by them i.e. hi- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee would not amount to manufacture, the corollary is that the appellant had cleared the rectifiers on which the credit was availed as such. If that be so, the appellant has to reverse the actual amount of CENVAT credit availed on such rectifiers. 6. The various case-laws quoted by the learned counsel in support of the proposition that the Revenue is precluded from seeking the reversal of modvat credit, once they have accepted the payment of duty on the manufactured goods will not carry the case of the appellant any further, as in those cases, it is observed that the duty liability discharged by the appellant therein was in excess of the credit availed by them on the inputs. In the case in hand, it is seen that the credit avai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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