2012 (12) TMI 428 - AT - Central Excise

Rectification of mistake - held that - the point of dispute is eligibility of Cenvat credit of duty paid on rough tiles i.e. rough aluminium die cast tiles which were subjected to the process of cleaning, buffing, electroplating etc. In the final order, after holding that these processes do not amount to manufacture, it has been held that Cenvat credit is not admissible. Thus on the basic issue involved in this case i.e. whether the appellant s processes on rough tiles amount to manufacture there is no scope for rectification and the question of admissibility of Cenvat credit is linked with this question only. The alternative plea which had been made and not considered, is that even if the appellant s process does not amount to manufacture, Cenvat credit of duty on rough tiles must be allowed by quashing the impugned order of CCE (Appeals), as the amount of Cenvat credit of duty on rough tiles which has been denied is the same as the rebate of duty on rough tiles to which the appellant would be entitled under Rule 18 of Central Excise Rules, 2002, as the processed tiles had been exported. This plea, in our view is not relevant to the issue involved in this case - admissibility of Cenvat credit of duty paid on rough tiles, as for the reasons given below, considering or not considering this plea will have not bearing on the final decision. f according to the appellant a contrary view is possible on this issue, the point raised would not satisfy the criteria for treating the same as mistake apparent from records - Misc. application rejected.

Summary

Issues:
Rectification of mistake apparent from records under Section 35C(2) of the Central Excise Act, 1944 regarding dismissal of appeal against demand of Cenvat credit on rough tiles subjected to processes not amounting to manufacture.

Analysis:
The case involved an application for rectification of mistake apparent from records under Section 35C(2) of the Central Excise Act, 1944. The dispute revolved around the appellant, a manufacturer of aluminium alloy ingots, availing Cenvat credit for duty paid on inputs. The issue stemmed from the appellant receiving duty paid aluminium die cast decorative tiles, subjecting them to processes, and exporting them. The Department contended that the processes did not amount to manufacture, leading to a demand for recovery of Cenvat credit, interest, and penalty. The Assistant Commissioner confirmed the demand, which was upheld by CCE (Appeals) and the Tribunal.

The appellant argued that their plea regarding admissibility of rebate of duty paid on crude tiles under Rule 18 for exported tiles was not considered by the authorities, impacting the final decision. The appellant sought a recall of the order for fresh consideration based on the rebate claim. The Department opposed the application, stating that the denial of Cenvat credit was justified as the processes did not constitute manufacture, citing relevant case law.

The Tribunal analyzed the submissions and relevant legal principles. It noted that the main issue was whether the processes on rough tiles amounted to manufacture, directly impacting the admissibility of Cenvat credit. The appellant's alternative plea for rebate under Rule 18 was deemed irrelevant as it did not affect the core decision on Cenvat credit eligibility.

The Tribunal emphasized the independence of Cenvat credit and rebate under Rule 18, highlighting that the failure to claim rebate in time barred the appellant from seeking it later. It concluded that considering the alternative plea would contravene Cenvat Credit Rules, 2002. The Tribunal dismissed the application, stating that the alternative plea was frivolous and did not meet the criteria for rectification of a mistake apparent from records as per established legal precedents.

In the final judgment pronounced on 2-5-2012, the Tribunal upheld the original decision, emphasizing that the appellant's alternative plea had no bearing on the core issue of Cenvat credit eligibility for the processes undertaken on the rough tiles. The application for rectification was thus dismissed.