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TMI Blog2019 (5) TMI 1479X X X X Extracts X X X X X X X X Extracts X X X X ..... establish any quantity of final product to have been cleared for home consumption without payment of duty. Appeal allowed - decided in favor of appellant. - Excise Appeal No. 70883 of 2016 - FINAL ORDER NO. 70814/2019 - Dated:- 10-4-2019 - SMT. ARCHANA WADHWA, MEMBER (JUDICIAL) And MR. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) Shri A. P. Mathur, Advocate M. B. Mathur, Advocate for the Appellant Shri Rajeev Ranjan, Additional Commissioner, Authorised Representative for the Respondent ORDER PER: ANIL G. SHAKKARWAR The present appeal is directed against Order-in-Original No. 06/Commissioner/HPR/2016-2017 dated 31.05.2016 passed by Commissioner, Customs, Central Excise Service Tax, Commissionerate Hapur). 2. The brief facts of the case are that the appellant were engaged in the manufacture of Menthol Flakes, Menthol Crystals, Dementholized Oil and essential oils and flavouring agents derived from Dementholized Oil. The raw-material for said final products was duty paid crude menthol. The appellant were availing benefit of Cenvat Credit of Central Excise duty paid on said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able on the said final product manufactured or produced by him, under a notification issued under Section 5A of the Act; or (ii) The said final product has been exempted absolutely by an exemption notification, issued under Section 5A of the Act and after deducting the said amount from the balance of said credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any final product whether cleared for home consumption or for export or for payment of service tax on any output service whether provided in India or exported. 9.1 From a perusal of the above sub-Rule, it is clear that this sub-Rule would be applicable only in the case when there is only one final product being made from one or more cenvated inputs and that final product has become exempt from duty or if there are more than one final products being made out of one or more cenvated inputs, all the final products have become exempt from duty at the same time. This Rule would not be applicable if more than one final products are being manufactured out of one or more final product and out of them only so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2008 would be subject to the provisions of Rule 6 and the Cenvat credit would be admissible only to the extent these inputs were used in or in relation to manufacture of dutiable final product and would not be admissible in respect of the quantity of the inputs which were used in the manufacture of exempted final products. Accordingly, in respect of clearance of exempted final products, an amount equal to the Cenvat credit involved on the inputs used in the manufacture of those final products shall be payable. 11. As regards the Cenvat credit remained of ₹ 7,68,608/- since this amount represents the duty paid on a consignment of Menthol on 29.02.2008 under No. 106 dated 29.02.2008 and since Menthol Flakes/Crystals become fully exempt from duty only w.e.f. 01.03.2008, this duty has been correctly paid and therefore when this consignment of Menthol was returned to the factory on 07.03.2008 for reprocessing, Cenvat credit of the duty of ₹ 7,68,608/- paid earlier has been correctly taken under Rule 16 of the Central Excise Rules, 2002. However, if after reprocessing the goods were cleared for home consumption without payment of duty by availing full du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order is passed in principles of provision of natural justice. (E) The Original Authority did not examine the documents submitted in respect of exports made of the exempted final products which were manufactured out of duty paid inputs. The Original Authority has ignored that evidence and based his finding only on the basis of said report dated 18.02.2016. Therefore, the impugned order is bad in law. (F) In respect of Credit of ₹ 7,68,608/- under Rule 16 of the Central Excise Rules, 2002 the Original Authority has held that the appellant did not inform the Department about receiving of the same and did not produce details of process undertaken by them in respect of said returned goods and therefore concluded that said Cenvat Credit was not available to the appellant. Such finding is contrary to law because under Said Rule 16 there is no requirement to inform the Department on receipt of duty paid final products back into the factory. (G) Under said Rule 16 burden is on Revenue to establish that the returned goods were not subjected to such processes which amounted to manufacture to deny the said Cenvat Credit. The s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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