2011 (4) TMI 1081 - AT - Central Excise

Cenvat credit manufacture - rough die Cast Aluminium decorative tiles - processes undertaken by the appellant like buffing, cleaning, lacquering and grinding, electroplating, etc. only increase their market value or artistic value Held that - processes, which do not change the basic character of the product but only enhance its market value, do not amount to manufacture. Since the processes undertaken by the appellant do not amount to manufacture, the appellant were not eligible for Cenvat credit and hence, the Cenvat credit has been rightly denied to them, appeal is dismissed

Summary

Issues:
1. Eligibility for Cenvat credit on rough die Cast Aluminium Castings.
2. Whether the process undertaken amounts to manufacture.
3. Applicability of relevant legal precedents.
4. Export under Bond and entitlement for Cenvat credit.

Analysis:

Issue 1:
The appellant, a manufacturer of Aluminium Alloys, availed Cenvat credit on rough die Cast Aluminium Castings. The Department contended that the process undertaken did not result in a new product, thus challenging the eligibility for Cenvat credit.

Issue 2:
The appellant argued that the conversion of rough die Cast tiles into fully finished decorative tiles constituted manufacture. They cited legal precedents, including the Brakes India Ltd. case, to support their claim. The Departmental Representative maintained that the processes undertaken did not amount to manufacture, emphasizing that the finished products had increased market value and artistic value without creating a new product.

Issue 3:
The Tribunal analyzed the processes undertaken by the appellant on the rough Tiles Castings. Drawing parallels with precedents regarding processes like printing on glass bottles and electroplating of M.S. Wires, the Tribunal concluded that the processes did not change the basic character of the product but only enhanced its market value. The Tribunal distinguished the Brakes India Ltd. case, stating that the processes in this case did not render the original product unusable, unlike the brake lining blanks in the cited case.

Issue 4:
Although the appellant mentioned export under Bond as a basis for entitlement to Cenvat credit, this plea was not raised during the earlier proceedings. The Tribunal dismissed the appeal, upholding the denial of Cenvat credit to the appellant based on the finding that the processes undertaken did not amount to manufacture.

In conclusion, the Tribunal affirmed the decision to deny Cenvat credit to the appellant, as the processes undertaken did not result in the emergence of a new product but only enhanced the market and artistic value of the existing product. The appeal was dismissed, emphasizing that processes enhancing market value without changing the basic character of the product do not constitute manufacture.