2004 (2) TMI 647 - AT - Central Excise

Summary

Issues:
1. Denial of Cenvat credit to the appellants for invoices issued by them.

Analysis:
The appeal was filed against the Commissioner (Appeals) order denying Cenvat credit to the appellants for invoices issued by them. The appellants, engaged in the manufacture of Bars/Rods, were despatching goods to various parties as per Tata Steel's direction. After conversion, some raw material remained unutilized, which the appellants cleared to other manufacturers on their own invoices. They also purchased unutilized raw material from Tata Steel, cleared it on their invoices after payment of duty, and took credit. The denial was based on the premise that the appellants could not take credit for goods cleared by them.

The appellants argued that Rule 57AB of Cenvat Credit Rules allowed using credit for duty payment on cleared inputs, and Rule 9(1) prohibited removal of excisable goods without duty payment. They contended that since they used the inputs for manufacturing their goods, clearing them on their invoices was not against the rules. The Revenue contended that as job workers of Tata Steel, the appellants could not issue invoices in their name and avail credit.

The Tribunal noted that the appellants cleared inputs received from Tata Steel on their invoices to other customers without objection from Revenue. The Revenue objected only to the credit for inputs purchased from Tata Steel. The Tribunal found that since the appellants had taken credit on inputs received in the factory and cleared them after payment of duty, the denial of credit was unsustainable. As the inputs were cleared on payment of duty and used in manufacturing final products, the impugned order was set aside, and the appeal was allowed.