2016 (12) TMI 152 - AT - Central Excise

CENVAT credit - Whether the main appellant M/s Hikal Ltd. is eligible to avail the CENVAT credit of CVD paid on the goods Isoproturon Tech or otherwise? - Held that - It is the case of the Revenue that the goods which are imported not inputs as it is not consumed for manufacture any final product. I find that both the lower authorities have erred in coming to such conclusion in as much, it is undisputed that main appellant had discharged duty on the final product, and in my view were eligible to avail the CENVAT credit of C.V.D. and Central Excise duty paid on the said goods . This law is now settled by the Hon ble High Court of Bombay in the case of Commissioner of Central Excise, Pune-III Vs. Ajinkya Enterprises 2012 (7) TMI 141 - BOMBAY HIGH COURT , where it was held that It is only on 24th June 2010, the Board has issued a Circular to the effect that the process of pickling does not amount to manufacture. Therefore, during the relevant period, that is, during the period from 2nd March 2005 to 31st December 2005, it could not be said that the issue was settled and that the assessee paid duty on decoiled HR/CR coils knowing fully well that the same were not manufactured goods. If duty on decoiled HR/CR coils was paid bona fide, then availing credit of duty paid on HR/CR coils cannot be faulted. CENVAT credit allowed - appeal allowed - decided in favor of assessee.

Summary

Issues involved: Eligibility of main appellant to avail CENVAT credit of CVD paid on imported goods.

Detailed Analysis:

1. Issue: Eligibility of main appellant to avail CENVAT credit of CVD paid on imported goods.

Analysis: The main issue in this case was whether the main appellant, M/s Hikal Ltd., was eligible to avail the CENVAT credit of CVD paid on the imported goods "Isoproturon Tech." The main appellant had re-packed, re-labeled, and cleared the goods on payment of duty, believing they were eligible for CENVAT credit. The Revenue argued that the imported goods were not inputs as they were not consumed in manufacturing any final product. However, the Member (Judicial) found that both lower authorities had erred in their conclusion. It was established that the main appellant had discharged duty on the final product, making them eligible to avail the CENVAT credit of C.V.D. and Central Excise duty paid on the imported goods. This legal principle was supported by the Hon'ble High Court of Bombay in a previous case and followed by the Tribunal in another case.

2. Decision:

Analysis: The Member (Judicial) concluded that the impugned order was unsustainable. Therefore, the impugned order was set aside, and the appeals were allowed with consequential relief. The main appellant was deemed eligible to avail the CENVAT credit of C.V.D. paid on the imported goods, based on the established legal principles and precedents cited in the judgment.