2007 (11) TMI 469 - AT - Central Excise

Summary

Issues Involved:
Denial of Modvat/Cenvat credit on furnace oil used for processing and producing excisable goods on job work basis.

Analysis:
The appeal challenged the denial of Modvat/Cenvat credit to the respondent on furnace oil used for processing and producing excisable goods on a job work basis. The ld. Commissioner (Appeals) upheld the impugned order-in-original, emphasizing the availability of Cenvat credit on furnace oil used for manufacturing both dutiable and exempted goods. The respondent utilized furnace oil, on which Cenvat credit was availed, for manufacturing CPC blue crude on job work basis for a principal manufacturer, clearing the resultant goods under challans without payment of duty. The Commissioner (Appeals) referenced a Tribunal decision in the case of Navsari Oil Products Ltd. v. CCE, emphasizing the permissibility of Modvat credit on inputs used for generating steam for manufacturing dutiable and exempted final products. Additionally, the decision in Jindal Polymers v. CCE was cited to support the availability of Modvat credit on inputs used for job work when the goods are cleared without duty payment to the parent manufacturer. The Commissioner (Appeals) concluded that the Cenvat credit was admissible based on established legal precedents.

Upon reviewing the Commissioner (Appeals)'s findings, it was noted that both lower authorities correctly applied the law as established by the Tribunal on the same issue. Consequently, the Tribunal found the decisions of the lower authorities to be correct and declined to interfere with them, ultimately rejecting the revenue's appeal. The judgment highlighted the consistency in the application of legal principles and precedents in determining the availability of Modvat/Cenvat credit on furnace oil used for manufacturing excisable goods on a job work basis.