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TMI Blog2016 (12) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... y - whether the denial of CENVAT credit on the ground that the appellant is not carrying out any manufacturing activity, is justified? - Rule 16 of Central Excise Rules. Held that: - From the plain reading of the Rule 16 it can be seen that if the assessee receive duty paid goods in his factory and carries out the various processes they can avail the CENVAT credit on said duty paid goods. The condition is that assessee is required to pay duty on reissue of bought out goods equivalent to the CENVAT credit availed, if the process does not amount to manufacture and if the process is amount to manufacture then the duty as per Section 4 is required to be paid i.e. on the transaction value. In the present case it is the contention of the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring, gauging, thickness measurement, dimension inspection, application of rust preventive oil, champering, tapping, welding, drilling, notching, thread cleaning depending on the type of the product, after carrying out aforesaid process they are clearing the same to the manufacturer on payment of Excise duty. The adjudicating authority denied the CENVAT credit on the semi finished product on the ground that the appellant is not carrying out any manufacturing activity, therefore they are not entitled to the CENVAT credit. Accordingly the demand of CENVAT credit amounting to ₹ 57,51,712/- and equal amount of penalty under Section 11A of the Act was confirmed. Being aggrieved by the Order-in-Original the appellant is before us. 2. Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on bought out semi finished goods, for this reason also the demand is unsustainable. He placed reliance on the following judgment:- (i) Prasad Films Laboratories Vs. Komal Metals Private Ltd [2001 (130) ELT 491 (Tri-Chennai)] (ii) Collector of Central Excise, Chandigarh Vs. Fine Packaging Private Ltd. [1995 (77) ELT 588 (Tribunal)] (iii) Commissioner of Central Excise, Indore Vs. M.P. Telelinks Ltd [2013 (287) ELT 101 (Tri-Delhi)] (iv) Commissioner of Central Excise Customs, Aurangabad Vs. Fine Packaging Private Ltd. [2016 (335) ELT 117 (Tri. -Mumbai)] (v) Minda Auto Gas Limited Vs. Commissioner of Central Excise, Delhi [2013 (287) ELT 101 (Tri-Delhi)] (vi) Shree Rubber Plast Co. P. Ltd Vs. Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Even if the activity does not amount to manufacture the appellant is entitled for the CENVAT credit on receipt of semi finished goods on the basis of reissue of goods on payment of duty. This is permissible in terms of Rule 16 of the Central Excise Rules, 2002, which is reproduced below:- Rule 16. Credit of duty on goods brought to the factory: (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other 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 uti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case it is the contention of the Revenue that the appellant is not carrying out any manufacturing activity. Therefore the appellant is required to pay the duty equivalent to the CENVAT amount. However, the fact remains that the appellant has discharged the duty on the transaction value of on the processed goods, which is more than credit availed. Therefore in such fact the appellant is entitled for credit under the provision of Rule 16. We also take a note that the appellant has paid excise duty on the process component more than the amount of CENVAT credit of brought out goods. Therefore under these circumstances no demands exist, As per the above discussion, we are of the considered view that the appellant has rightly availed the CENV ..... X X X X Extracts X X X X X X X X Extracts X X X X
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