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2014 (1) TMI 111 - AT - Central ExciseDenial of Cenvat credit Cut sheet as an activity amounts to manufacture or not Stay application Held that - The duty has been paid by M/s. Neel Metal P. Ltd. and goods have been received by the appellant and further utilized - The reassessment cannot be done at their level - proceedings having been dropped at the end of M/s. Neel Metal P. Ltd. which was the entire basis of the Revenue s case which no longer survives - Prima facie case is in favour of the assessee so as to allow the stay petition unconditionally Stay granted.
Issues:
1. Denial of Cenvat credit to the appellant based on the activity of M/s. Neel Metal P. Ltd. not amounting to manufacture. Analysis: The judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Ms. Archana Wadhwa, addressed the issue of denial of Cenvat credit to the appellant due to the activity of M/s. Neel Metal P. Ltd. not being considered as manufacturing. The appellant received cut iron and steel sheets from M/s. Neel Metal P. Ltd., who had paid duty and availed Cenvat credit. The Revenue contended that M/s. Neel Metal P. Ltd. was not entitled to avail credit as their activity did not amount to manufacture. It was noted that proceedings against M/s. Neel Metal P. Ltd. were initiated but later dropped by the Commissioner of Central Excise Delhi, III. Despite this, the demand against the appellant was confirmed solely on the ground that M/s. Neel Metal P. Ltd. could not have paid duty, thereby questioning the appellant's entitlement to credit. However, since duty had been paid by M/s. Neel Metal P. Ltd. and the goods were received and utilized by the appellant, the reassessment at the appellant's level was deemed inappropriate. The Tribunal found a prima facie case in favor of the appellant, leading to the unconditional allowance of the stay petition. The Tribunal emphasized that since the proceedings against M/s. Neel Metal P. Ltd. had been dropped, which formed the basis of the Revenue's case, the issue no longer existed. Considering the significant revenue involved and the simplicity of the matter, the appeal was scheduled for a hearing on a specific date. The judgment highlighted the importance of the duty being paid by the supplier and the appellant's legitimate utilization of the goods received, ultimately leading to a favorable decision in favor of the appellant.
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