2006 (7) TMI 538 - AT - Central Excise

Summary

Issues:
Appeal on availment of Modvat credit by the purchaser of goods.

Analysis:
The main issue in this case pertains to the availment of Modvat credit by the purchaser of goods, specifically focusing on the payment of duty by the manufacturer and the subsequent credit claimed by the purchaser. The respondents in this case received bare copper wire after paying central excise duty and took Cenvat credit as per the Cenvat Credit Rules. However, the adjudicating authority disallowed the credit, arguing that the process of drawing wire from wire rods does not amount to manufacture, leading to the inadmissibility of the Cenvat credit on duty paid for the copper wire.

Upon appeal, the Commissioner (Appeals) acknowledged that the finished goods cleared by the respondents were insulated PVC wires, and recognized that the process of manufacturing insulated PVC wires from bare wire indeed constitutes manufacturing. Consequently, the Commissioner deemed the respondents eligible for availing credit and emphasized that the credit cannot be denied on the bare wire simply because the manufacturer of the bare wire had paid the duty erroneously.

The appellate tribunal, after careful consideration, found the impugned order to be legally sound and not in any way unreasonable. The tribunal emphasized that the order was based on established legal principles and did not warrant any intervention to set it aside or modify it. Ultimately, the tribunal dismissed all revenue appeals, affirming the decision in favor of the respondents and upholding their right to avail the Cenvat credit on the duty paid for the copper wire.