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TMI Blog2015 (10) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the impugned pallets are clearly eligible for exemption under Notification No. 67/95-CE dated 16.3.1995 for captive consumption within the factory of the appellants. - Decided in favor of assessee. Cenvat Credit in relation to defective goods and not fit for further consumption - debit notes were issued to supplier of inputs and recovered amount from suppliers. - Held that:- the fact of the recovery of the cost of the wasted inputs should not be a ground for asking them to reverse the Cenvat credit availed, because it is not the Departments case that the inputs have been removed as such, without being put to use. There is no legal authority with the Department for such recovery. Also it is seen from the debit notes that the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit involved is thus, recoverable from the appellant. (iii) The audit also observed that appellant has recovered Freight Charges from buyers of finished goods by raising commercial invoices/ Debit Notes in certain cases. At the time of removal of their final goods, appellant did not show separately the freight charges in the invoices issued. 2. A show cause notice dated 07.01.2006 was issued in this regard. The adjudicating authority namely, Deputy Commissioner, Central Excise & Customs vide the impugned order-in-original adjudicated the matter and confirmed the demand of Central Excise duty of ₹ 54,140/- along with interest on plastic pallets under provisions to Section 11A of Central Excise Act, 1944. He also confirmed Cenvat cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that the issue is settled and freight charges are not to be included in the assessable value. He also cited case laws in his favour. On the other hand, learned Authorised Representative for the Revenue strongly refuted the arguments advanced by the learned Advocate and draws our attention to the findings of the adjudicating authority and the Commissioner (Appeals). 4. For better appreciation of the issue, Notification No. 67/95-CE dated 16.03.1995 is reproduced below:- Capital goods and inputs captively consumed within the factory of production In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 (1 of 1944). TABLE Sr. No. Description of inputs Description of final products (1) (2) (3) 1. All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely, - (i) goods classifiable under any heading of Chapter 24 of the Schedule to the said Act; (ii) goods classifiable under heading Nos. 36.05 or 37.06 of the Schedule to the said Act; (iii) goods classifiable under sub-heading Nos. 2710.11, 2710.12, 2710.13 or 2710.19 (except Natural gasoline liquid) of the Schedule to the said Act; (iv) high speed diesel oil classifiable under heading No. 27.10 of the Schedule to the said Act. All goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pallets are also covered in the description of inputs, and final products manufactured by the appellants are also covered by the description of final products specified in the notification.Therefore, the impugned pallets are clearly eligible for exemption under Notification No. 67/95-CE dated 16.3.1995 for captive consumption within the factory of the appellants. The Hon'ble Tribunal in the case of Raymond Limited vs. CCE, Bhopal - 2014 (302) ELT 415 (Tri. Mumbai) and in the case of ACE Glass Containers Limited vs. CCE, Meerut-1 - 2010 (250) ELT 110 (Tri. Del.) has held that racks and trolleys, and Plastic crates, respectively, manufactured by the appellants were used in or in relation to the manufacture of final goods would be eligible fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fact that the inputs have suffered duty when the supplier cleared them to the appellant. It. is also a fact the appellant has received the inputs and used them in the manufacture of final products. The fact of the recovery of the cost of the wasted inputs should not be a ground for asking them to reverse the Cenvat credit availed, because it is not the Departments case that the inputs have been removed as such, without being put to use. There is no legal authority with the Department for such recovery. Also it is seen from the debit notes that the appellant has recovered only the cost of the material and not excise duty portion. 7. As regards the issue of freight charges, it is observed that the matter is no more res-integra. The Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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