2012 (4) TMI 610 - HC - Central Excise

Summary

Issues involved: Appeal by Commissioner of Customs, Central Excise and Service Tax against Appellate Tribunal's order reversing Order-in-Original regarding Cenvat credit for manufacturing Denatured Ethyl Alcohol.

Details of the Judgment:

Issue 1: Manufacturing process of Denatured Ethyl Alcohol
The respondent-assessee availed Cenvat credit for Denatured Ethyl Alcohol under Cenvat Credit Rules. Original Authority disputed manufacturing process, claiming Denatured Ethyl Alcohol was not manufactured in the distillery but merely by adding denatured elements in rectified spirit in the tanker.

Issue 2: Order-in-Original and appeal
Original Authority held assessee not entitled to Cenvat Credit Scheme, demanding payment of balance credit. Appellate Tribunal found mixing toxin to manufacture Denatured Ethyl Alcohol was accepted practice, granting benefit under Cenvat Scheme till 2002. Assessee followed applicable procedure and availed Cenvat credit.

Issue 3: Dispute over manufacturing location
While it was confirmed that Denatured Ethyl Alcohol was produced by mixing toxin with Ethyl Alcohol in the tanker, the dispute was whether this process occurred within the distillery. Lack of evidence to prove mixing was done outside the distillery.

Conclusion:
The Appellate Tribunal upheld the manufacturing of Denatured Ethyl Alcohol within the distillery, as accepted by the authority and granted Cenvat credit benefit. The appeal by the Commissioner was dismissed as no error was found in the Tribunal's order.