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2013 (6) TMI 486 - AT - Central ExciseCenvat Credit - denial of CENVAT credit on certain input (printed aluminium foils) which was supplied DLL and received in the appellant s factory and used in the manufacture of P or P medicaments during the period from December, 2005 to October, 2008. - The demand is on the ground that M/s. DLL did not undertake any manufacturing activity and hence should not have paid duty on printed aluminium foils and consequently credit of such duty was not admissible to the appellant. Held that - Following the decision in Kwality Biscuits Limited vs. Commisisoner - 2005 (12) TMI 467 - CESTAT, BANGALORE , Indian Oil Corporation Limited vs. Commissioner - 2006 (5) TMI 400 - CESTAT, BANGALORE , Commissioner vs. MDS Switchgear Ltd. - 2008 (8) TMI 37 - SUPREME COURT , Commissioner vs. Hylite Cables - 2007 (2) TMI 409 - CESTAT, AHMEDABAD , etc. The ratio of these decisions is that any duty actually paid (whether or not payable) on input which has been received in the factory of the manufacturer of final product and used in or in relation to manufacture of the final product must be allowed as MODVAT/CENVAT credit to be utilized for payment of duty on the final product. It also emerges from the cited decisions that questions like whether the input is dutiable, whether any element of cost is includable in the assessable value of the input etc. cannot be agitated at the end of manufacturer of the final product. - Demand set aside - decided in favor of assessee.
Issues:
Impugned demand of duty arising from denial of CENVAT credit on printed aluminium foils supplied by M/s. Danna Laminates Ltd. for manufacturing P or P medicaments. Applicability of previous judgments in similar cases. Dispute regarding the excisability of printed aluminium foils at the end of M/s. Danna Laminates Ltd. Analysis: The judgment revolves around the impugned demand of duty on the denial of CENVAT credit for printed aluminium foils supplied by M/s. Danna Laminates Ltd. The appellant used these foils in the manufacture of P or P medicaments between December 2005 and October 2008. The demand was based on the argument that M/s. Danna Laminates Ltd. did not undertake any manufacturing activity, hence should not have paid duty on the foils, making the credit inadmissible. However, the Bench referred to a previous case involving a similar factual scenario and set aside a similar demand of duty, emphasizing that the benefit of CENVAT credit cannot be denied based on the duty paid by the job worker as long as the inputs were used in the manufacturing process and were covered by valid documents. The judgment further highlights that the lower appellate authority did not consider relevant precedents, such as the decision in Kwality Biscuits Limited vs. Commissioner, which established that duty paid on inputs used in the manufacturing process must be allowed as MODVAT/CENVAT credit. The appellant also presented other decisions supporting this principle, reinforcing that any duty paid on inputs used in the final product's manufacture should be credited. The judgment emphasizes that questions regarding the dutiability of inputs or inclusion of cost elements in assessable values cannot be raised at the end of the final product manufacturer. The judgment also addresses the argument presented by the Department regarding the ongoing dispute between them and M/s. Danna Laminates Ltd. regarding the excisability of printed aluminium foils. However, the Tribunal ruled that the dispute between the Department and M/s. Danna Laminates Ltd. does not impact the appellant's entitlement to CENVAT credit for the inputs used in the manufacturing process. Following the cited decisions and principles, the Tribunal set aside the demand, ultimately allowing the appeal based on established legal precedents and principles. In conclusion, the judgment provides a detailed analysis of the issues surrounding the denial of CENVAT credit on printed aluminium foils, referencing relevant legal precedents and principles to support the decision to set aside the demand and allow the appeal.
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