9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (3) TMI 128 - AT - Central ExciseCenvat Credit on inputs - Activity of supplier amounting to manufacturing activity or not - conversion of black bars / coils into bright bars - Held that - The Tribunal in the case of CCE Vs. Punjab Lighting Aids P. Ltd. - 2011 (6) TMI 221 - CESTAT, DELHI held that, wires had been received by the respondent during the period from August, 2003 to 8-7-04, i.e., during the period for which the 1st and 2nd provisos had been added to sub-rule (3) to Rule 16. Therefore, the amount paid by the manufacture-suppliers of wire on the clearance of wire has to be treated as duty and respondent who had received the wire would be eligible for its CENVAT credit. The only aspect which has to be checked in as to whether the wire manufacturers had obtained refund of the duty paid by them on the wire and in case they have taken the refund, the respondent would not be eligible for CENVAT credit. Matter remanded back for denovo adjudication in the light of the observations made in the case of Punjab Lighting Aids P. Ltd. - Decided in favor of assessee.
Issues:
1. Whether the conversion of black bars/coils into bright bars amounts to manufacture under Chapter 72 of the Schedule to the CETA, 1985. 2. Applicability of Rule 16(3) of the Central Excise Rules retrospectively. 3. Eligibility of CENVAT credit for wire drawing units during a specific period. 4. Interpretation of relevant provisions and circulars by the Tribunal. Issue 1: Conversion of black bars/coils into bright bars: The case involved the conversion of black bars/coils into bright bars, with a show-cause notice alleging that this activity did not amount to manufacture. The Hon'ble Supreme Court's decision in the case of Technoweld Industries was cited, which held that drawing of wire from wire rods does not constitute manufacture. The adjudicating authority ordered recovery of irregular CENVAT credit, but the Commissioner (Appeals) set aside this order in favor of the respondent/assessee. Issue 2: Applicability of Rule 16(3) retrospectively: The Tribunal noted that Rule 16(3) of the Central Excise Rules was retrospectively amended by the Taxations Laws (Amendment) Act, 2006, affecting units making wires from wire rods during a specific period. The amendment clarified the treatment of wire drawing units as assessees eligible to avail CENVAT credit, aligning with the Supreme Court's decision and subsequent legislative changes. Issue 3: Eligibility of CENVAT credit for wire drawing units: The Tribunal referred to Circular No. 831/8/06-CE, which addressed the retrospective amendment in Rule 16 to declare wire drawing units as assessees for a particular period. The amendment aimed to regularize credit taken at the input stage and payment of duty on drawn wire, ensuring that wire drawing units could avail the credit of duty paid on inputs and utilize it for duty payment on drawn wire during the period of amendment. Issue 4: Interpretation of relevant provisions by the Tribunal: Referring to the case of CCE Vs. Punjab Lighting Aids P. Ltd., the Tribunal emphasized the eligibility of CENVAT credit for wire recipients during the specified period, subject to certain conditions regarding refund of duty paid by wire manufacturers. The Tribunal set aside the impugned order and remanded the matter for denovo adjudication based on the observations in the Punjab Lighting Aids case, emphasizing the need for proper opportunity of hearing before passing any order. In conclusion, the Tribunal's judgment addressed the manufacturing process, retrospective amendments, CENVAT credit eligibility for wire drawing units, and the interpretation of relevant provisions to ensure compliance and fair treatment in excise matters.
|
