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2018 (6) TMI 1664 - HC - Central ExciseCENVAT Credit - nexus/connection with the final product - whether the credit can be availed by the petitioner through an unconnected final product? - HELD THAT - The answer can be traced from the N/N. 45/89 dated 11th October 1989 wherein prohibition has been incorporated that the credit amount shall neither be refunded to the manufacturer nor adjusted against or utilised for payment of duty on any excisable goods under any other circumstances - The goods which do not constitute a raw material and not used as input for manufacturing the final product the credit though available cannot be utilised and used against the final product manufactured by the same assessee. This Court therefore does not find that the CENVAT credit available to the petitioner can be used and utilised or adjusted against the final product when the goods over which the petitioner has paid the excise duty is not used as raw material or input therefor. Petition disposed off.
Issues:
1. Refund of CENVAT credit for manufacturing Vanaspati Oil. 2. Utilization of CENVAT credit for payment of Central Excise duty on Vanaspati Oil. 3. Claiming credit against final product unrelated to raw material. Issue 1: Refund of CENVAT credit for manufacturing Vanaspati Oil The petitioner, a manufacturer of Vanaspati Oil, faced a dispute regarding a significant amount of money in CENVAT credit after the closure of its manufacturing units. The petitioner sought a refund of the credit, which was initially denied by the court based on Notification No. 45/89, prohibiting such refunds. The court upheld the decision, citing precedents and legal provisions, denying the petitioner's claim for a cash refund of the credit. Issue 2: Utilization of CENVAT credit for payment of Central Excise duty on Vanaspati Oil In a subsequent writ petition, the court examined the petitioner's utilization of credit from a second manufacturing unit for the same final product. The court found that the petitioner's use of credit from the second unit was valid as the right to utilize the credit accrued to the asset and the person who owned the unit. The court referred to relevant notifications and previous judgments to support its decision, allowing the petitioner to utilize the credit against the final product manufactured in the second unit. Issue 3: Claiming credit against final product unrelated to raw material The petitioner, after discontinuing Vanaspati Oil manufacturing, sought to use the accumulated credit for manufacturing corrugated boxes and baby care products, which also attracted excise duty. The court analyzed the petitioner's claim in light of legal precedents and found that the credit could not be used against a final product unrelated to the raw material for which excise duty was paid. Citing Notification No. 45/89, the court emphasized that the credit, though indefeasible, could only be utilized if the raw material was used as an input for manufacturing the final product. Consequently, the court dismissed the petitioner's claim to use the CENVAT credit against the unrelated final product, concluding the writ petition without costs.
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