2012 (7) TMI 823 - AT - Central Excise

Availment of CENVAT Credit - Whether the respondent is eligible for Cenvat credit of duty paid on aluminium foils which were supplied by their suppliers - Held that - Central Government holds that recipient of the duty paid goods that arose due to cutting and slitting and printing of aluminium foils, a process that may not amount to manufacture, should not be denied Cenvat credit - Decided against Revenue.

Summary

Issues:
Eligibility for Cenvat credit of duty paid on aluminium foils supplied by manufacturers.

Analysis:
The main issue in this case revolves around the eligibility of the respondent to avail Cenvat credit of duty paid on aluminium foils supplied by their manufacturers. The revenue authority contended that the aluminium foils supplied did not arise out of a manufacturing process, as the supplier was engaged in a slitting and cutting process. Consequently, the duty paid on such supplies was deemed not to be excise duty, leading to the denial of Cenvat credit to the respondent.

The adjudicating authority upheld the demand against the respondent, who then appealed to the first appellate authority. The first appellate authority, after due process of law, set aside the initial order and allowed the respondent's appeal, stating that the Modvat Credit/Cenvat Credit availed by the respondent need not be reversed.

Upon reviewing the submissions and relevant notifications, it was noted that Notification No. 24/2012-C.E. (N.T), dated 19-4-2012, explicitly permitted the respondent to avail Cenvat credit. The notification clarified that the duty paid on cutting, slitting, and printing of aluminium foils did not require reversal of Cenvat credit, even if the process did not amount to manufacturing. This notification supported the respondent's entitlement to the credit, as pointed out by the learned counsel.

The Central Government's stance, as outlined in the notification, emphasized that recipients of duty paid goods resulting from processes like cutting and slitting of aluminium foils, which may not constitute manufacturing, should not be deprived of Cenvat credit. Consequently, the appeal filed by the Revenue was found to lack merit, and the impugned order was deemed correct and legally sound, without any deficiencies. As a result, the appeals filed by the Revenue were dismissed by the Appellate Tribunal CESTAT AHMEDABAD.

In conclusion, the judgment centered on interpreting the eligibility of the respondent for Cenvat credit on duty paid on aluminium foils supplied by their manufacturers. The decision hinged on the interpretation of relevant notifications and legal provisions, ultimately leading to the dismissal of the Revenue's appeals and upholding the respondent's entitlement to the Cenvat credit under the specified conditions.