2009 (11) TMI 796 - AT - Central Excise

Summary

Issues involved: Interpretation of Cenvat credit eligibility for bright bars used in manufacturing motor vehicle parts and cranes; applicability of judgment on wire rods to bright bars; authority to question excisability of inputs.

Interpretation of Cenvat credit eligibility: The appellants, manufacturers of motor vehicle parts and cranes, received bright bars and claimed duty credit. Show cause notices challenged this claiming drawing wire from rods does not constitute manufacture. Original Authority dropped proceedings, but Commissioner (Appeals) reversed. Appellants argued bright bars differ from wire rods, and allegations not made in notices. Tribunal found notices lacked specifics on bright bars' use, so wire rod judgment inapplicable. No basis for relief under Rule 16 amendment. Upheld Original Authority's decision, despite flawed reasoning, as Commissioner's reversal lacked grounds.

Applicability of wire rod judgment to bright bars: Appellants contended bright bars distinct from wire rods, questioning Commissioner's decision based on wire rod judgment. Tribunal agreed, emphasizing lack of notice allegations on wire drawing. Rejecting Commissioner's doubts on excisability of inputs, Tribunal restored Original Authority's favorable orders for appellants.

Authority to question excisability of inputs: Tribunal criticized Commissioner for challenging excisability of inputs without proper grounds, reinstating Original Authority's decisions in appellants' favor. Emphasized officers at recipient units lack authority to dispute excisability or classification determined by sending units, to prevent chaos. Commissioner's orders overturned, affirming appellants' entitlement to Cenvat credit on bright bars.

(Separate Judgment by Judge): None.