2011 (9) TMI 677 - HC - Central Excise

Manufacture - wrong availement of Cenvat credit on believe that process amounts to manufacture - As the interest credit exceeded duty liability AO demanded duty and interest on differential amount - Tribunal passed order ignoring the material on record - Held That - Case remanded back to pass the necessary order after considering technical particulars.

Summary

Issues:
1. Whether the process carried out by the assessee amounts to manufacture.
2. Validity of the order passed by the authorities regarding cenvat credit availed on rectifiers.
3. Imposition of penalty and demand of interest on the assessee.
4. Consideration of technical documents by the Tribunal in the appeal.

Analysis:
1. The appeal was filed by the assessee challenging the order passed by the authorities, who held that the process carried out did not amount to manufacture. The rectifiers were cleared by the assessee on which cenvat credit was availed. The duty levied was upheld by the tribunal, although the penalty imposed was set aside.

2. The assessee availed cenvat credit on rectifier units, which were cleared as rectifier modules. The audit party observed that the processes carried out did not amount to manufacture, leading to a demand for reversal of differential credit taken. The adjudicating authority confirmed the demand, imposed penalties, and demanded interest. The assessee contested this, leading to an appeal to the Tribunal.

3. During the appeal, the assessee submitted technical documents showing the description and specifications of rectifiers, process flow charts, and other relevant details. The Tribunal, in its order, noted the absence of technical write-ups to prove that the processes were incidental or ancillary to the manufactured product. The Tribunal did not consider the technical particulars provided by the assessee, leading to the order being set aside.

4. The High Court set aside the impugned order and remanded the matter back to the Tribunal for fresh consideration. The Tribunal was directed to take into account the technical write-ups and literature provided by the assessee, emphasizing the importance of considering all relevant evidence before making a decision.