2004 (1) TMI 280 - AT - Central Excise

Summary

Issues involved: Appeal against Order-in-Appeal allowing Cenvat Credit to M/s. M.P. Telelinks Ltd. Dispute over whether the process undertaken amounts to manufacture for Cenvat credit eligibility.

In this case, the Revenue appealed against the Order-in-Appeal allowing Cenvat Credit to M/s. M.P. Telelinks Ltd. The dispute revolved around whether the process undertaken by the Respondents, involving the procurement of PIJF telephone cables and subsequent processes, amounted to manufacture for the purpose of Cenvat credit eligibility. The Revenue contended that no new excisable commodity emerged from the process, thus challenging the eligibility of the Respondents for Cenvat credit. On the other hand, the Respondents argued that the duty had been paid at the time of clearance, making them eligible for the credit. Additionally, they cited Rule 57AB(1C) of the Central Excise Rules, 1944, to support their position that the duty liability was discharged when the inputs were removed as such from the factory.

Upon considering the arguments from both sides, the Tribunal noted certain undisputed facts. It was acknowledged that the Respondents had procured PIJF telephone cables on which duty was paid and that the duty liability was discharged when the cables were removed after undergoing the process. The Tribunal emphasized that if the Central Excise duty was levied and collected on the goods upon removal, the claim that the process of manufacture had not occurred could not be upheld. The Tribunal found merit in the argument that the Credit had been utilized in accordance with Rule 57AB(1C) of the Central Excise Rules, 1944, resulting in a revenue-neutral situation. Consequently, the Tribunal rejected the appeal filed by the Revenue, affirming the eligibility of the Respondents for Cenvat credit based on the circumstances of the case.