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2015 (7) TMI 1121 - AT - Central ExciseCenvat credit - Rule 14 of CENVAT Credit Rules, 2004 - stock transfer from Ghaziabad to Hosur - piston and piston rings are repacked and re-labelled at Hosur with part number and supplied to the customers - period involved is from October 2007 to February 2009 - Held that - there is no dispute on the fact that the activity of repacking and relabelling amounts to manufacture as per the definition given under section 2(f)(iii) read with Note 6 of Chapter XVII. It is found that the Department has already accepted this issue in favour of the assessee vide Order No. 38/2010 dated 30.12.2010 and Order No. 21/2012 dated 30.3.2012 for the subsequent period (March 2009 to December 2009 and from Jan. 2010 to June 2010) wherein it was held that the activities of unpacking, repacking and relabeling amounted to manufacture in terms of Section 2(f)(iii) of the Central Excise Act, 1944 and there is no dispute on these facts. Further, the repacked products were cleared on payment of duty on a higher value and the Department accepted the payment of duty on the final products. There is no justification to deny the credit on the goods used while accepting the duty on the final products. Having accepted the duty on the final products as manufactured, it is not open to the Department to deny the credit on the inputs that the final products were not manufactured. Further, the Department has also accepted the adjudication orders dated 30.12.2010 and 30.3.2012. Therefore, the appellants are eligible for CENVAT credit. - Appeal allowed with consequential relief
Issues:
Denial of CENVAT credit on stock transfer from Ghaziabad to Hosur. Analysis: The appeal involved the denial of CENVAT credit on stock transfer from Ghaziabad to Hosur. The appellant, engaged in manufacturing automotive parts, repacked and re-labelled goods at Hosur before selling them to customers like TVS Motors and Ashok Leyland. The adjudicating authority disallowed CENVAT credit under Rule 14 of CENVAT Credit Rules, 2004, and imposed penalties for different periods. The appellant argued that repacking and relabelling at Hosur constituted manufacturing under Section 2(f)(iii) of the Central Excise Act, 1944, making the inputs eligible for CENVAT credit. The appellant emphasized that repacking was necessary to meet specific customer requirements and render the products marketable, citing legal precedents and the importance of part numbers in the automobile industry. The Revenue contended that the activities at Hosur did not amount to manufacturing under Section 2(f)(iii) of the Central Excise Act, 1944. They argued that goods from Ghaziabad were already marketable, and repacking and relabelling were not recognized as manufacturing activities under relevant provisions. However, upon reviewing the records and arguments from both sides, the Tribunal found that the repacking and relabelling activities indeed constituted manufacturing under Section 2(f)(iii) read with Note 6 of Chapter XVII. Notably, the Department had previously accepted this issue in favor of the assessee for subsequent periods, as evidenced by specific orders. The Tribunal highlighted that the repacked products were cleared on payment of duty at a higher value, and the Department had acknowledged the duty on the final products. Consequently, the Tribunal held that denying CENVAT credit while accepting the duty on the final products was unjustified. Given the acceptance of previous adjudication orders and the clear manufacturing nature of the activities, the Tribunal allowed the appeal, setting aside the impugned order and granting consequential relief to the appellants. In conclusion, the Tribunal ruled in favor of the appellant, holding that the activities of unpacking, repacking, and relabelling constituted manufacturing under the Central Excise Act, 1944. The Department's acceptance of the manufacturing nature of these activities for subsequent periods and the duty payment on final products supported the appellant's eligibility for CENVAT credit. Therefore, the impugned order was set aside, and the appeal was allowed with consequential relief.
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