2017 (6) TMI 370 - AT - Central Excise

CENVAT credit - job-work - The cylinders were sent to the job worker under Rule 4(5) of the CENVAT Credit Rules and the job worker paid the duty on reconditioned cylinders on the value of reconditioned cylinders. On receipt of the cylinders, the appellants availed CENVAT Credit of duty paid by the job worker - Held that - It is an admitted fact that the job worker has paid the duty on job worker goods and payment of duty by the job worker has not been objected by the Revenue. In that circumstances, CENVAT Credit cannot be denied to the appellants in terms of Rule 3 of CCR, 2004 - the appellants have correctly taken the CENVAT Credit on the invoices issued by the job worker for job worked goods - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Maintainability of appeal due to multiple Orders-in-Original
2. Denial of Cenvat Credit on reconditioned cylinders

Issue 1: Maintainability of Appeal
The appellants appealed against an order denying Cenvat Credit. The Department argued that as there were multiple Orders-in-Original, the appeal was not maintainable under Rule 6A of the CESTAT Procedural Rules. The appellants cited a precedent where a similar issue was deemed maintainable in a composite adjudication order. The Tribunal analyzed Rule 6A and concluded that the appeal was maintainable in this case, as distinct numbers were given to a composite order-in-original. The decision in Shree Cement Ltd. Vs. CCE, Jaipur-II was deemed inapplicable as it did not involve composite Orders-in-Original, unlike the present case.

Issue 2: Denial of Cenvat Credit
The Department contended that reconditioning of cylinders did not amount to manufacture, hence the job worker was not required to pay duty. Consequently, the appellants were denied Cenvat Credit. However, the Tribunal noted that the job worker had paid duty on the goods, which was not objected by the Revenue. Citing legal precedents, including V.G. Steel Industry Vs. CCE and CCE, Chennai-III Vs. Sundaram Auto Components Ltd., it was established that Cenvat Credit could not be denied to the appellants if the duty had been paid by the job worker. The Tribunal further referenced the case of Pearl Polymers Ltd. Vs. CCE, Gurgaon, where it was held that Cenvat Credit cannot be denied in such circumstances. Consequently, the Tribunal set aside the impugned orders and allowed the appeals with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellants, holding that the appeal was maintainable and that the denial of Cenvat Credit on reconditioned cylinders was unjustified based on legal precedents and the duty payment by the job worker.