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TMI Blog2010 (2) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... it on the premise that the first part of sub-rule (2) of Rule 16 covers second clearances of finished goods as such without undertaking any process, such second clearances, as in the instant case, are also covered by the expression ‘any other case’ figuring in the second part of sub-rule (2), duty paid by the appellant on their second clearances of tubes is in order and no additional amount of duty can be demanded from them, demand of duty is set aside on merits and consequently there can be no penalty on the appellant either. The appeal is allowed with consequential relief to the appellant. - E/198/2009 - A/136/2010-WZB/C-IV/SMB, - Dated:- 24-2-2010 - Shri P.G. Chacko, J. Shri Joseph Kodianthara, Advocate, for the Appellant. Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken on the goods returned by the tyre manufacturing unit to which the goods had been originally cleared. The duty paid on the second clearances was based on the value determined under Section 4 of the Act, which was lower than the amount of CENVAT credit. The show cause notice demanded the differential amount under the proviso to Section 11A(1) of the Act on the ground of contravention of rules with intent to evade payment of duty . It also proposed to recover interest on duty under Section 11AB of the Act, besides proposing penalty under Section 11AC of the Act. These proposals were contested. In adjudication of the dispute, the Assistant Commissioner demanded differential duty of Rs. 55,028.98 from the appellant under Section 11A along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 3 or section 4 or section 4A of the Act, as the case may be. Learned counsel has argued that, under sub-rule (1) of Rule 16, the duty-paid goods returned by a customer need not necessarily be subjected to any process of manufacture. The phrase for any other reason used in the sub-rule has been significantly adverted to in this context. It is submitted that such goods could be cleared as such under sub-rule (2) of Rule 16 on payment of appropriate duty at the rate applicable on the date of removal and on the value determined under Section 4 of the Act. In this context, the focus is on the expression in any other case used in the text of sub-rule (2), The argument is that the second clearances made by the appellant are covered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise, 2005 (181) E.L.T. 380 (S.C.). On the merits of the case, learned SDR has claimed support from Hindalco Industries Ltd. v. Commissioner of Central Excise, 2007 (215) E.L.T. 547 (Tri. Mumbai). In the context of pleading time-bar, learned counsel has referred to Continental Foundation Jt. Venture v. Commissioner of Central Excise, 2007 (216) E.L.T. 177 (S.C.). 4. I have given careful consideration to the submissions. The case on merits would rest on correct interpretation of Rule 16. This provision was examined by a Division Bench of this Tribunal in the case of Hindalco Industries Ltd. (supra), but in that case, the first clearances were rejected by the consignee and hence brought back to the assessee s factory. After und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of production only for some kind of a process. On the other hand, the learned counsel has argued that such goods could be brought back into the factory of production for any other reason also. He submits, the appellant cleared the goods as such, for logistic reasons , to other tyre-manufacturing units of the company. Learned counsel has endeavoured to fortify his arguments by referring to the expression, in any other case found in the text of sub-rule (2). 5. In my view, one cannot overlook the manner in which sub-rule (2) opens. The sub-rule opens thus : If the process to which the goods are subjected before being removed ... It appears to me that sub-rule (2) pre-supposes that the goods received by the assessee under sub-rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner (Appeals). The appellate authority also recorded thus : The fact that the goods did not undergo any process amounting to manufacture is not in dispute. Having so found, the lower authorities have demanded reversal of the CENVAT credit on the premise that the first part of sub-rule (2) of Rule 16 covers second clearances of finished goods as such without undertaking any process. I have already held that such second clearances, as in the instant case, are also covered by the expression any other case figuring in the second part of sub-rule (2). It would follow that the duty paid by the appellant on their second clearances of tubes is in order and no additional amount of duty can be demanded from them. 6. In the result, the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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