2015 (4) TMI 117 - HC - Central Excise

Denial of CENVAT Credit - Whether in the facts and circumstances of the case, the first respondent Appellate Tribunal is right in holding that the second respondent is entitled to Cenvat credit on the capital goods/inputs used in the manufacture of goods which are exempted and which are cleared without payment of duty on Job work basis - Held that - Following decision of Commissioner Versus Hwashin Automotive India Pvt. Ltd. 2014 (9) TMI 444 - Madras High Court - Decided against Revenue.

Summary

Issues:
1. Entitlement to Cenvat credit on capital goods/inputs used in the manufacture of exempted goods cleared without payment of duty on job work basis.

Analysis:
The case involved Civil Miscellaneous Appeals filed by the Revenue challenging the Tribunal's order regarding the entitlement of Cenvat credit on capital goods and inputs used in manufacturing exempted goods cleared without duty payment on a job work basis. The assessee supplied machine forgings to principal manufacturers without duty payment, utilizing Cenvat credit on inputs. The Department objected, issuing a show cause notice. The Adjudicating Authority upheld the objection, ordering recovery of the Cenvat credits. On appeal, the Commissioner (Appeals) affirmed the decision. The Tribunal allowed the appeal, citing precedent and holding that the job-worked goods were not exempted from duty, contrary to Rule 6(1) of the CENVAT Credit Rules, 2004. The Revenue appealed the Tribunal's decision.

The Court noted that a similar issue had been addressed in a previous decision involving Hwashin Automotive India Pvt. Ltd., where the question was decided against the Revenue. Referring to the precedent, the Court highlighted a decision following judgments from the Bombay High Court and the Punjab and Haryana High Court, based on a decision of the Apex Court. The Court affirmed the previous decision and dismissed the Civil Miscellaneous Appeals, along with the connected Miscellaneous Petitions, without costs.

In conclusion, the High Court, following established precedent and previous judgments, upheld the entitlement to Cenvat credit on capital goods and inputs used in manufacturing exempted goods cleared without duty payment on a job work basis. The Court's decision aligned with prior rulings and dismissed the Revenue's appeals, emphasizing consistency in the application of legal principles and interpretations of relevant laws.