2016 (7) TMI 1141 - AT - Central Excise

Manufacturing - denial of Cenvat Credit of duty paid on the inputs as the processes undertaken by the appellant does not amount to manufacture - Held that - The Tribunal in the case of Rico Auto Industries Ltd. Vs. CCE New Delhi (2003 (2) TMI 512 - CESTAT NEW DELHI) has held that even if the processes undertaken by the assessee do not amount to manufacture credit of duty paid on the inputs would still be admissible on export of the said processed input in terms of provisions of Rule 57F(2) and Board s circular 283/117/96-CE. - Decided in favour of aseessee.

Summary

Issues:
- Availment of Cenvat credit on duty paid inputs for processes not amounting to manufacture.

Analysis:
The appellant, engaged in manufacturing Pressure Die Cast Articles Of Zinc, also undertakes processes like cleaning, anodizing, electroplating, powder coating on inputs for export under bond after availing Cenvat credit. The Revenue contended that these processes do not constitute manufacture, thus challenging the appellant's entitlement to Cenvat credit. Proceedings were initiated resulting in the impugned order under dispute, leading to the present appeal.

The Tribunal, while acknowledging the appellant's argument that the processes amount to manufacture, found that the appeal could be resolved even if the said processes were not considered as such, aligning with the Revenue's stance. Referring to the case of Rico Auto Industries Ltd. Vs. CCE New Delhi, the Tribunal highlighted that even if the processes do not qualify as manufacture, credit of duty paid on inputs remains admissible upon export of the processed input under Rule 57F(2) and Board's circular 283/117/96-CE.

The Commissioner (A) did not contest the applicability of the aforementioned decision to the legal issue at hand but refrained from following it, citing an ongoing appeal by the Revenue. However, no evidence was presented to indicate that the Tribunal's decision had been overruled by a higher appellate body. Additionally, another Tribunal decision in the case of R.F.H. Metal Castings (P) Ltd. Vs. CCE Jaipur supported the admissibility of duty credit for such processes.

Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant, granting consequential relief. The judgment was dictated and pronounced in open court, ensuring the appellant's entitlement to Cenvat credit on duty paid inputs even for processes not meeting the threshold of manufacture.