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TMI Blog2008 (1) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub-rule only says that normal duty is payable on the re-manufactured product cleared by the manufacturer. This has nothing to do with the credit taken under sub-rule (1). In other words, in order to avail Cenvat credit under sub-rule (1) there is no requirement for manufacturer to clear the returned goods to the same party who returned the goods. We therefore declare that the appellant is entitled to claim duty credit on returned goods under sub-rule (1). The appeal is accordingly allowed cancelling the order of the Tribunal confirming disallowance of the claim. - 41 of 2005 - - - Dated:- 24-1-2008 - C.N. Ramachandran Nair and T.R. Ramachandran Nair, JJ. [Judgment per : C.N. Ramachandra Nair, J.]. - This is an appeal filed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit under Rule 16(1) that the goods returned should be re-manufactured or reconditioned and sold to the original purchaser who returned the goods. Annexure- R1 issued by the Ministry of Finance, Central Board of Excise Customs states that the eligibility for availing Cenvat credit facility under Rule 16(1) arises only if the goods after reconditioning or remaking are cleared to the same party who returned the goods. In order to appreciate the contentions sub-rules (1) and (2) of Rule 16 of the Central Excise Rules as it stood then, are extracted herein :- "Rule 16. Credit of duty on goods returned to the factory. - (1) Where any goods on which duty has been paid at the time of removal thereof are subsequently returned to the factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the goods. In either case when goods are returned as defective goods warranting re-conditioning or re-manufacturing or otherwise, the manufacturer is entitled to take Cenvat credit as if such goods are received as inputs. Sub-rule (2) deals with the manufacturer's liability for payment of excise duty while clearance of returned goods. The first part of sub-clause (2) of Rule 16 says that if the process to which the goods are subjected before return does not amount to manufacture, the duty payable is equal to the Cenvat credit taken under sub-rule (1) and on the other hand if the goods returned are subject to manufacture, then duty shall be payable at the applicable rate on the date of removal and on the value determined under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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