9911796707
TMI Blog2007 (9) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... T.K. Jayaraman, Member (T)]. -1. The appellants filed an appeal against Order-in-Appeal No. 156/2006 dated 26-12-2006 passed by the Commissioner of Central Excise (Appeals) Bangalore. They filed stay petition against the said order to this Bench. Consequently, Stay Order No. 441/2007 dated 1-6-2007 was passed wherein it was ordered that the appellant should pre-deposit Rs. 1 lacs and the balance of duty and penalty payable would be waived. The appellants filed a miscellaneous application No. 261/2007 for modification of the stay order on the ground that they had already reversed the disputed amount of Rs. 5,96,304/- in the month of May 2006 immediately after issue of Order-in-Original No. 8/2006 dated 20-3-2006 issued by the Joint Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise duty of Rs. 5,96,304/- on 31-1-2004. The customer rejected the goods on account of certain defects and the goods were brought back to the factory of the appellant on 27-2-2004 and 12-3-2004. The appellants availed Cenvat credit of Rs. 5,96,304/- on 25-03-2004. Later they, on the basis of fresh purchase order, cleared the goods free of duty under cover of CT3 certificates. Revenue proceeded against the appellants by issue of show cause notice dated 10-8-2005 for clearing the goods without payment of duty. Duty was demanded under Rule 16 of Central Excise Rules, 2002. The allegation was that the appellant had not furnished the details of the said clearances in the monthly return justifying invoking extended period of limitation. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received but only documents were transferred. New allegation is made without giving notice to the appellant. This is violation of the principles of natural justice since the show cause notice and Order-in-Original specifically record that the rejected goods have been received back by the appellants. He referred to the material gate pass duly acknowledged by the appellant and also Annexure-I showing that the goods were received and dispatched subsequently. It was urged that under erstwhile Rule 173H and 173L of Central Excise Rules, 1944 refund was granted under Rule 173L even though the goods were cleared to EOU without payment of duty 6. Rule 16 is successor to Rule 173H/L. Under the earlier rules if duty was paid at the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ul consideration of the issue, we find that originally the goods were cleared on payment of duty to a 100% EOU by the appellant. In fact, if the appellants had obtained CT3 certificates, they could have cleared the goods even without payment of duty as the recipient is a 100% EOU. Goods cleared to 100% EOU are exempted from payment of Central Excise duty vide Notification No. 22/2003. Obviously, the appellants committed an error as they did not follow, the proper procedure. However, when the goods were found defective and they were returned under Rule 16 of the Central Excise Rules, they took Cenvat credit of the duty originally paid namely, i.e. an amount of Rs. 5,96,304/-. Therefore, there is nothing wrong in taking credit of the duty ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take Cenvat credit of the duty paid as if such goods are received as inputs under the Cenvat Credit Rules, 2002 and utilize this credit according to the said rules. (2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the Cenvat credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of Section 3 or Section 4 or Section 4A of the Act, as the case may be. (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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