2006 (2) TMI 365 - AT - Central Excise

Summary

Issues involved: Appeal against disallowance of Cenvat credit by the Commissioner of Central Excise (Appeals-ll), Bangalore.

Details of the Judgment:

Issue 1: Availment of Cenvat credit without manufacturing facility
The appellant, a footwear manufacturer, faced labour issues at their Peenya factory and operated from the premises of a job worker. They availed Cenvat credit during a specific period. The Revenue alleged irregularity as the appellants did not have plant and machinery for manufacturing excisable goods. The original authority disallowed the credit, which was upheld by the Commissioner (Appeals). The appellants contended that they utilized the credit for excise duty payment on goods cleared from the job worker's premises, causing no revenue loss. The Revenue highlighted procedural irregularities.

Judgment: The Tribunal observed that the appellants, as per the Central Excise Act, could be considered manufacturers even without plant and machinery, as they engaged job workers for production. The denial of Modvat credit was deemed unsustainable, especially since there was no revenue loss to the government. The appeal was allowed, granting consequential relief if applicable.

Key Points:
- Appellants operated from job worker's premises due to labour issues at their factory.
- Revenue alleged irregularity in availing Cenvat credit without manufacturing facility.
- Original authority and Commissioner (Appeals) disallowed the credit.
- Appellants used credit for excise duty payment without causing revenue loss.
- Tribunal deemed appellants as manufacturers under the Central Excise Act, allowing the appeal due to no revenue loss.

This judgment highlights the importance of understanding the legal definitions of terms like "manufacturer" and the utilization of credits in excise duty payments to determine the validity of claims in excise-related matters.