2009 (1) TMI 596 - AT - Central Excise

Summary

Issues:
1. Duty liability on iron ore concentrate manufacturing.
2. Confusion regarding input credit entitlement.
3. Discharge of duty liability at Vizag plant.
4. Alleged deviation from job work procedure.
5. Applicability of Cenvat Credit Rules.
6. Pre-deposit requirement during appeal.

Analysis:
1. The appellant, a manufacturer of Iron Ore concentrate, faced confusion regarding duty liability and input credit entitlement following a show cause notice issued by the Department. The appellant contended that their activities amount to manufacture, allowing them to claim Cenvat credit on inputs used. The Adjudicating Authority upheld the appellant's contention, recognizing the manufacturing activity and allowing the input credit.

2. The appellant, during the appeal, argued that the finished goods from their Vizag plant had already suffered duty, referencing specific judgments to support their position. They sought relief from duty liability and penalties due to the confusion created by the Department's show cause notice.

3. The Department highlighted the appellant's deviation from the prescribed job work procedure, emphasizing the importance of following the rules to prevent revenue loss. They disputed the appellant's claim that the goods manufactured at the Chhatisgarh plant were used in the final product at the Vizag plant, questioning the evidence presented.

4. Citing Supreme Court judgments, the Department argued against the appellant's plea, emphasizing the need to discharge duty liability even if the goods underwent processing at another plant. They raised concerns about the appellant's motives, alleging a deliberate attempt to evade duty payment.

5. The Department also raised concerns about the supply of excisable inputs from the Vizag plant to the Chhatisgarh plant, highlighting the impact of using exempted inputs on duty liability entitlement. They argued that certain rules, if applied, would render other rules redundant, supporting their stance on pre-deposit requirements.

6. After hearing both parties, the Tribunal examined the case closely, noting the appellant's confusion during the disputed months and the subsequent resumption of duty payment post-adjudication. The Tribunal acknowledged the appellant's claim regarding duty discharge at the Vizag plant, indicating a prima facie view in favor of dispensing pre-deposit in the interest of justice pending appeal, subject to verification.

This detailed analysis of the judgment addresses the key issues raised by the parties and the Tribunal's considerations in resolving the matter.