2013 (3) TMI 547 - AT - Central Excise

Availment of CENVAT credit on inputs - Excisability of the input - meaning of Manufacture - Held that - The respondent has submitted that there is no dispute with regard to receipt of aluminium foils in their factory and use thereof in or in relation to the manufacture of their final product. - The respondent satisfied the essential requirements for CENVAT credit. Notwithstanding excisability of the input, the supplier of the input paid duty thereon and issued a valid invoice to the respondent. The input so received in the respondent s factory was used in or in relation to manufacture of their final product and its duty-paid character was evidenced by the invoices. So he is entitled to take CENVAT credit of duty paid on the input. - Decided against the revenue.

Summary

Issues:
Entitlement to CENVAT credit on inputs supplied by M/s. Planet India Remedies Pvt. Ltd. during July to September 2008.

Analysis:
The key issue in this case was whether the respondent was entitled to claim CENVAT credit of Rs. 6,840 on the inputs supplied by M/s. Planet India Remedies Pvt. Ltd. during the specified period. The appellant contended that the input, arising from the cutting and slitting of jumbo aluminum foils, did not amount to manufacture as per a Supreme Court ruling. The appellant argued that the manufacturer of the final product was not eligible for CENVAT credit on duty paid for such inputs. On the other hand, the respondent justified their entitlement to the credit based on the receipt and use of aluminum foils in the manufacturing process, along with the payment of duty by the input supplier.

Upon examination, the Tribunal found that the respondent had met the necessary conditions for claiming CENVAT credit. Despite the question of excisability of the input, it was established that the supplier had paid duty on the input and issued valid invoices to the respondent. The input received by the respondent was utilized in the manufacturing process of the final product, and its duty-paid status was evidenced by the invoices. The Tribunal emphasized that the crucial factor was the duty payment on the input, rather than the process of its manufacture. Consequently, the Tribunal upheld the decision of the Commissioner (Appeals) in favor of the respondent, determining that they were indeed entitled to take CENVAT credit on the duty paid for the input.

In conclusion, the Tribunal dismissed the department's appeal, affirming the respondent's right to claim CENVAT credit on the duty paid for the inputs supplied by M/s. Planet India Remedies Pvt. Ltd. The judgment highlighted the significance of the duty-paid status of the input over the process of manufacture, ultimately ruling in favor of the respondent's entitlement to the credit.