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2022 (8) TMI 701 - AT - Central ExciseCENVAT Credit - inputs - castings and cast articles of iron, pipe fittings etc. falling under Central Excise Tariff 7325 and 7307 - activity amounting to manufacture or not - denial of CENVAT Credit availed by the appellant on the strength of invoices issued by the supplier - HELD THAT - The Ld. Commissioner in the impugned Order has observed that the goods removed by the consigner is not a manufactured product and therefore, the assessee appellant is not entitled to credit. He has also observed that the assessee availing the credit was under obligation to examine the fact as to whether the goods received by him are a manufacture product and whether duty was rightly charged by the supplier i.e., M/s. Indo Thai Flexible Tubes Ltd. In the present case, it is found that the jurisdictional Commissioner of the said vendor has dropped the entire proceedings which has been duly upheld by the Tribunal as well as the Hon ble High Court. There are no reason to deny the claim of CENVAT Credit in the hands of the Appellant who is the recipient of the impugned goods from the said manufacturer - also, the legal position already stands decided in favor of the Appellant that CENVAT Credit cannot be denied on input on the ground that the activity undertaken by the assessee does not amount to manufacture when the assessee has admittedly deposited output duty on final product. Appeal allowed - decided in favor of appellant.
Issues:
Appeal against Order-in-Original confirming demand of central excise duty and disallowance of CENVAT Credit on inputs. Analysis: The appeal was filed by M/s Kiswok Industries Pvt. Ltd. against an Order-in-Original confirming a demand of central excise duty and disallowance of CENVAT Credit on inputs for the period May 2006-October 2008. The Appellant, engaged in the manufacture of excisable goods, availed CENVAT Credit on M.S. rod cuttings supplied by a particular supplier. The Department contended that the supplier did not undertake any manufacturing activity and thus was not liable to charge and pay central excise duty. Proceedings were initiated through a Show Cause Notice to deny the CENVAT Credit availed by the Appellant based on the invoices from the supplier. The Ld. Commissioner, after due process, adjudicated the show-cause notice, leading to the current appeal by the Appellant. The Appellant's Advocate argued that the issue against the supplier had been settled in favor of the supplier, and thus, the Appellant, as the recipient of goods, should not be deprived of the CENVAT Credit benefit. The Advocate cited precedents where CENVAT Credit on inputs cannot be denied even if the activity by the assessee does not amount to manufacture, as long as output duty has been paid on the final product. The Authorized Representative for the Revenue supported the Ld. Commissioner's findings and requested the rejection of the appeal for lacking merit. After hearing both sides and reviewing the records, the Tribunal found that the jurisdictional Commissioner of the vendor had dropped all proceedings, which had been upheld by the Tribunal and the High Court. Consequently, the Tribunal concluded that there was no basis to deny the Appellant's claim for CENVAT Credit as the recipient of the goods. The Tribunal also affirmed the legal position that CENVAT Credit cannot be denied on input merely because the assessee's activity does not amount to manufacture when the output duty has been paid on the final product. Therefore, the Tribunal set aside the impugned Order passed by the Ld. Commissioner, deeming it legally unsustainable, and allowed the appeal with consequential relief as per law. The judgment was pronounced in open court on 16.08.2022.
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