Archana Wadhwa, - (1.)AFTER allowing the stay petition unconditionally, I proceed to decide the appeal itself with the consent of both the sides.
(2.)The issue involved relates to Cenvat credit availed by the appellant during the period March, 2Q03 to December, 2003 in respect of plastic moulded furniture originally cleared by them on payment of duty and consequently returned to them by their customers as damaged /broken furniture. Such credit was availed by the appellant in terms of the provisions of the Rule 16 of Central Excise Rules, 2002. They have specifically contended before the authorities below that their dealers was returning the rejected furniture under their rejection memo and the same was invariably accompanied by the duplicate copies of the central excise invoices originally issued by them. These documents are clearly co-related to the returned furniture, as the furniture is printed with the month of manufacture, Rule 16 of Central Excise Rules, 2002 permits taking of credit on the returned goods. Reliance was placed upon the Tribunal's judgments in the case of Gebbs India Pvt. Ltd., reported in 1996 (16) RLT 493 (Tri.) and Gujarat Containers Ltd. - 2000 (125) E.L.T. 495 (Tri.).
The above contentions were not accepted and the authorities below rejected the appellants claim of credit and confirmed the demand of duty of Rs. 4,25,838/- and also imposed personal penalty of identical amounts. The Commissioner (Appeals), while rejecting the appeal, observed as under : -

"I have carefully examined the case records including the Appellants submissions made in writing at the time of personal hearing and observe that the Appellants are relying upon a number of CEGAT/other judgments as cited in the ground of appeal. These judgments are not squarely applicable in the case inasmuch as the Appellants after receiving the defective goods are cutting into pieces and then mixing and mixing the scrap with fresh Raw Material and the quantity of the newly added fresh Raw Material is 50%. The goods cannot be manufactured out of the scrap of the returned goods. This shows that they are manufacturing new products and it cannot be said that the same returned goods are remade or remanufactured. Moreover, I have already dismissed the appeal of the same Appellant on the same issue for the earlier period vide Order-in Appeal No. 420/C.E./CHD2004, dated 11-6-2004. I also fully agree with the findings of the adjudicating authority and as such uphold the Order-in Original."

(3.)I have heard Shri M.H. Patil, Id. Advocate and Shri N. V. B. Nair, Id. JDR.