2007 (3) TMI 149 - AT - Central Excise

Cenvat/Modvat - Revenue contended that respondent is not entitle for the Cenvat credit on the ground that the process of cutting not amount to manufacture Held that the revenue contention was not correct and allowed Cenvat credit to respondent

Summary

Issues: Whether goods processed but not undergoing manufacture as per the Central Excise Act entitle an assessee to Cenvat credit.

Analysis:
The appeal raised the question of whether duty-paid goods, not undergoing manufacture as defined by the Central Excise Act, would entitle an assessee to Cenvat credit if they undergo a cutting process. The Revenue argued that even if the goods are utilized in any manner after not meeting the strict definition of "manufacture," the assessee should not be entitled to Cenvat credit. The Revenue contended that mere export of non-manufactured goods should not grant relief under the law, justifying the imposition of appropriate duty by the adjudicating authority.

The respondent/assessee argued that the process of converting Chequered Coils into M.S. Tear (Chequered Plate) constituted manufacturing, making the goods eligible for Cenvat credit upon export. The respondent relied on the order of the Appellate Authority and cited a Tribunal decision in Syndet India Ltd. v. CCE, Mumbai, supporting their position. The Tribunal's decision in Standard Surfactants Ltd. v. CCE was also referenced, emphasizing the liberal approach towards granting input credit in relation to manufacture.

Upon hearing both sides and examining the record, it was found that the process undertaken by the respondent/assessee was considered "manufacture" by the learned Commissioner, justifying the entitlement to Cenvat credit upon export. The Appellate Authority upheld the decision based on the Tribunal's precedent in Syndet India Ltd. and the earlier case of Standard Surfactants Ltd. The decision highlighted the importance of judicial discipline in following established precedents.

While the Revenue relied on the statutory definition of manufacture, the rationale of the decision in Standard Surfactants Ltd. was acknowledged for its liberal interpretation regarding input credit in relation to manufacture. Ultimately, the Appellate Order was upheld, emphasizing the consistent application of judicial decisions and the allowance of Cenvat credit for goods processed but not meeting the strict definition of manufacture.

In conclusion, the Revenue's appeal was unsuccessful, with the judgment maintaining the position that processed goods, even if not considered manufactured under strict definitions, can entitle an assessee to Cenvat credit based on established legal interpretations and precedents.