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TMI Blog2016 (10) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the scrap. It is the contention of the Department that the conversion of printed/unprinted corrugated boxes into scrap cannot be considered as a process of manufacture. Hence, the credit availed under Rule 16(1) is required to be reversed. I do not find any discrepancy in the observation of the learned Commissioner (Appeals) in this regard, in as much as the provisions of the said Rules are specific. In the present case, it cannot be said that the process by which the defective goods are converted into scrap, should be considered as manufacture within the definition of manufacture as laid down under Section 2(l) of Central Excise Act, 1944. Therefore, on merit, the Appellant has no case. Period of limitation - Held that:- appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese goods were cleared as scrap on payment of duty on the transaction value without reversing the credit. Consequently, a demand notice was issued for recovery of CENVAT Credit of ₹ 9,17,691/- on the returned goods cleared as scrap with a proposal for imposition of penalty. On adjudication, the demand was confirmed and penalty of equal amount was imposed under Section 11AC of Central Excise Act, 1944. Aggrieved by the said order, the Appellants have preferred an appeal before the learned Commissioner (Appeals), who in turn, reduced the demand to ₹ 6,28,582/- and penalty of equal amount. Hence, the present appeal. 4. The learned Advocate Shri Anand Nainawati for the Appellants has submitted that the cartoons received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any reason and utilisation of said credit in accordance with the CENVAT Credit Rules. It is also clear that in the event of process to which the returned goods are subjected, does not result into manufacture, then the Assessee is required to pay amount equal to the CENVAT Credit availed at the time of receipt of such defective goods. In the present case, converting the corrugated boxes into scrap, cannot be considered a process of manufacture. Therefore, the Appellant was required to reverse he credit availed under Rule 16(1) of the Central Excise Rules 2002. He submits that this fact was suppressed from the knowledge of the Department. Hence, the learned Commissioner (Appeals) has rightly confirmed the demand. 6. I find that the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. [Explanation. - The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.] (3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the [Principal Commissioner or Commissioner, as the case may be]. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise, Bombay [1995 (78) ELT 401 (SC)], it was held that mere omission to disclose the correct information would not amount to suppression of facts unless there was a deliberate attempt made to escape the payment of duty. Where facts are known to both the parties, it cannot be held that there was suppression of facts. It was observed in Para 4 as follows:- "4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. The meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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