2006 (5) TMI 327 - AT - Central Excise

Summary

Issues involved: Application for waiver of pre-deposit of duty of Rs. 50,45,263; Denial of credit on the ground of manufacturing processes not amounting to manufacture.

Summary:
The Appellate Tribunal CESTAT, New Delhi heard an application for waiver of pre-deposit of duty amounting to Rs. 50,45,263. The revenue had denied the credit to the appellant, contending that the processes undertaken did not constitute manufacturing, thus disentitling the appellant from the credit. The appellant, engaged in manufacturing H.B. Wire, availed credit for duty paid on raw material, wire rods, and cleared the wire after appropriate duty payment, which was not disputed by the revenue. Consequently, the Tribunal waived the pre-deposit of the entire duty for the appeal hearing.

The Tribunal referred to precedents to support its decision. It cited the case of Sri Venkateswara Co. v. CCE, Coimbatore, where a similar demand was set aside as the manufacturer had paid more duty than the credit. Additionally, the Tribunal mentioned the case of CCE, Indore v. M.P. Telelinks Ltd., where a demand was also set aside on the same grounds. Furthermore, the Tribunal highlighted a ruling by the Hon'ble Supreme Court in the case of CCE v. Naramada Chematur Pharmaceuticals Ltd., where it was emphasized that denying credit when the duty paid exceeds the credit is not justified. The Supreme Court held that in such cases, where duty paid is more than the credit, the credit cannot be denied based on the final product not being dutiable.

Based on the above discussion and legal precedents, the Tribunal set aside the impugned order and allowed the appeal. The decision was dictated and pronounced in open court.