Case Law Details
Brief of the Case
In the case of M/s. Rupa & Co. Limited Vs. The Commissioner of Central Excise, it was held that what is contained in finished product is only a quantity of all the inputs of the same weight as that of the finished product would presuppose that all manufacturing processes would never have an inherent loss in the process of manufacture. The expression ‘inputs of such finished product’ contained in finished products’ cannot be looked at theoretically with its semantics. It has to be understood in the context of what a manufacturing process is. If there is no dispute about the fact that every manufacturing process would automatically result in some kind of a loss such as evaporation, creation of by-products, etc., the total quantity of inputs that went into the making of the finished product represents the inputs of such products in entirety.
Brief Facts
The appellant is a manufacturer of cotton knitted garments and cotton knitted fabrics, falling under Sub-Heading Nos.6101.00 and 6002.92 respectively under the First Schedule to the Tariff Act, 1985. On the ground that the appellant had wrongly availed CENVAT credit on the stock declared on 1.4.2003 and utilized the same for payment of duty towards clearance of knitted garments manufactured by them, a show cause notice dated 8.7.2004 was issued. The appellant gave a reply on 29.7.2004. Thereafter, a personal hearing was conducted and the Commissioner of Central Excise passed an Order in Original dated 3.11.2004, disallowing a claim for CENVAT credit and ordering the recovery of credit amount of Rs.7,06,433/-, apart from directing the appellant to pay interest under Section 11AB of the Central Excise Act, 1944 and a penalty under Rule 13 of the CENVAT Credit Rules, 2002.
The appellant filed a statutory appeal before the Commissioner (Appeals). But, the Commissioner disposed of the appeals by an order dated 13.1.2005, holding the appellant guilty of claiming CENVAT credit, to which, they were not entitled. However, the amount of penalty was reduced from Rs.7,06,433/- to Rs.70,643/-. The appellant then filed an appeal before CESTAT. The appeal was disposed of by the Tribunal by an order dated 6.2.2006 sustaining the orders in principle, but setting aside the quantum of duty and penalty and remitting the matter back to the Original Authority for re-quantifying the duty and penalty. On the question, in relation to which, the Tribunal remanded the matter back to the Original Authority, the appellant has no difficulties. But, on the point that was sustained by the Tribunal in principle, the appellant has come up with the above appeal.
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