2007 (8) TMI 525 - AT - Central Excise

Summary

Issues involved:
The denial of deemed Cenvat credit on man-made fabrics exported due to inclusion of post-manufacturing activities in assessable value.

Issue 1: Denial of Deemed Cenvat Credit
The issue in this case revolves around the denial of deemed Cenvat credit availed by the respondents on man-made fabrics manufactured and exported by them. The Revenue contends that the deemed credit was inflated by including values of post-manufacturing activities such as inspection, special export packing grades, and manufacturing profit, making it ineligible. The ld. Commissioner (Appeals) allowed the appeal, citing a Tribunal decision involving Steel Authority of India Ltd., where it was established that all costs incurred inside the factory for making goods marketable, even if undertaken by the buyer, should be included in the assessable value. Referring to a CBEC Circular, it was concluded that costs of processes carried out in the factory, whether by the manufacturer or customer, form part of the assessable value. As the facts differed from a Supreme Court case, Ujagar Prints Ltd., the deemed credit facility was deemed correctly availed, leading to the rejection of the Revenue's appeal.

In conclusion, the Appellate Tribunal CESTAT, Mumbai upheld the impugned order, rejecting the appeal filed by the Revenue.