2015 (10) TMI 1252 - AT - Central Excise

CENVAT Credit - Manufacturing activity - conversion of round bars into bright bars - Held that - Tribunal in Ajinkya Enterprises vs. CCE, Pune-III- 2013 (6) TMI 610 - CESTAT MUMBAI along with other judgements placed reliance on Super Forgings and Steel Ltd. Vs. CCE, Chennai- 2007 (7) TMI 77 - CESTAT, CHENNAI and observed that once duty on the final products has been accepted, credit cannot be denied even if the activity does not amount to manufacture. - Counsel for the respondent and conceded by the Departmental Representative that on the very same issue, in the assessees own case, this Tribunal 2015 (1) TMI 292 - CESTAT NEW DELHI (In the case of M/s.R.B.Steel Services, Shri Mahavir Bright Steel Udyog and Punch Ratna Steel Pvt.Ltd. vs. CCE, Rohtak) has held in favour of the respondents. - No infirmity in the impugned order. The same is upheld - Decided against Revenue.

Summary

Issues:
- Appeal filed by Revenue against order allowing Cenvat Credit
- Whether drawing of steel bright bar from black steel bar amounts to manufacture
- Interpretation of relevant judgments and circulars
- Consideration of Notification NO.28/2010-CE (NT)
- Precedents regarding denial of credit even if activity does not amount to manufacture

Analysis:
1. The appeal was filed by the Revenue challenging the order allowing Cenvat Credit availed by the respondent. The respondent was engaged in the drawing of steel bright bar from black steel rod and availing Cenvat Credit on inputs used for their final products.

2. The issue revolved around whether the process of drawing steel bright bar from black steel bar amounts to manufacture. Various judgments were cited, including Shree Ram Wire Industries vs. CCE and Vee Kayan Industries vs. CCE, to determine the manufacturing status of the process. The Circular issued by the Board also played a role in the show cause notice issued to the respondents.

3. The Commissioner (Appeals) passed an order in favor of the respondents, stating that they are not liable to reverse or pay back the Cenvat Credit. This decision was based on Notification NO.28/2010-CE (NT) dated 1.9.2010 and the interpretation of relevant judgments.

4. The Tribunal, in Ajinkya Enterprises vs. CCE, Pune, along with other judgments, emphasized that once duty on the final products has been accepted, credit cannot be denied even if the activity does not amount to manufacture. This principle was crucial in the consideration of the case.

5. During the hearing, it was noted that in a previous case involving the same issue, the Tribunal had ruled in favor of the respondents. This precedent, along with the arguments presented, led to the conclusion that there was no infirmity in the impugned order. Consequently, the appeal was dismissed, upholding the decision in favor of the respondents.