2024 (3) TMI 448 - AT - Central Excise

Recovery of CENVAT Credit alongwith interest and penalty - Process amounting to manufacture or not - Appellants are importing copper coated wires and they were carrying out processes like cutting, rewinding, branding, testing and repacking on the same - HELD THAT - The issue is no more res integra. The Mumbai Tribunal in M/S. GEE LTD. AND S.M. AGARWAL VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE-I 2022 (10) TMI 957 - CESTAT MUMBAI in the appellant s own case has followed the judgement of Hon ble Bombay High Court in the case of Commissioner of Central Excise, Pune-III vs. Ajinkya Enterprises and has held the demand made seeking to recover the Cenvat credit from the appellants which is in respect of the processed goods actually cleared by them on payment of central excise duty has to be set aside. The demand set aside - appeal allowed.

Summary

Issues involved:
The issue involves whether the activities undertaken by the appellant amount to manufacture under Section 2(f) of the Central Excise Act, 1944, and if the appellant is eligible to avail Cenvat Credit for inputs used in the process.

Comprehensive Details:

Manufacturing Activities:
The appellant, importing copper coated wires, carried out various processes like cutting, rewinding, branding, testing, and repacking on the wires before clearing the finished goods and paying excise duty. The Department contended that these activities did not constitute manufacturing under the Central Excise Act. The appellant argued that since the Department accepted the excise duty paid on the finished goods, they should not be denied Cenvat Credit for the inputs used. The appellant relied on relevant case law to support their position.

Legal Precedents:
The appellant cited the case of GEE Ltd. v Commissioner of Central Excise, Thane-I, a decision by the Mumbai High Court in Commissioner of Central Excise, Pune-III v. Ajinkya Enterprises, and Final Order No.76733 of 2023 in Nilachal Iron & Power Limited vs. Commissioner of CGST & Excise, Jamshedpur. These cases established that if the Department accepted the excise duty on finished goods, the appellant should not be denied Cenvat Credit for inputs used, even if the activities did not strictly amount to manufacturing as per Section 2(f) of the Central Excise Act, 1944.

Judgment and Decision:
The Tribunal found that the issue was settled based on the Mumbai Tribunal's decision in the appellant's own case, following the judgment of the Bombay High Court in Commissioner of Central Excise, Pune-III vs. Ajinkya Enterprises. The Tribunal emphasized that if the duty on final products had been accepted by the Department, CENVAT credit availed need not be reversed, even if the activity did not strictly amount to manufacture. Therefore, the demand seeking to recover Cenvat credit from the appellants for processed goods cleared by them on payment of central excise duty was set aside, following the jurisdictional High Court's decision.

Conclusion:
In conclusion, the Tribunal allowed the appeals in favor of the appellant, granting consequential relief as per the law based on the established legal precedents and the decision of the jurisdictional High Court.