2015 (10) TMI 1975 - AT - Central Excise

Denial of CENVAT Credit - Duty levied on raw material - Imposition of penalty - Held that - Decision in the case of CCE, Hyderabad vs. Deepthi Formulations Pvt.Ltd. 2013 (3) TMI 547 - CESTAT BANGALORE followed - No infirmity in the impugned order that calls for interference - Decided against Revenue.

Summary

Issues:
Challenge to impugned order regarding duty demand and penalty on availing Cenvat Credit.

Analysis:
The appeal was filed by the Revenue challenging an order that confirmed duty demand and penalty on the respondent, who had availed Cenvat Credit on raw materials supplied by another party. The audit revealed that the process carried out by the supplier did not amount to manufacture, resulting in the duty being wrongly paid and passed on to the respondent. The Commissioner (Appeals) allowed the respondent's appeal, setting aside the demand and penalty, leading to the Revenue's appeal.

The Revenue contended that the supplier had supplied goods resulting from a non-manufacturing process, thus the respondent wrongly availed Cenvat Credit. On the other hand, the respondent argued that they had received raw materials with duty paid, satisfied the conditions for Cenvat Credit, and cited relevant case law to support their position.

The Tribunal considered the submissions and referred to a previous decision where it was held that as long as the input was duty-paid and used in the manufacture of the final product, the Cenvat Credit could not be denied based on whether the input arose from a manufacturing process. The Commissioner (Appeals) also observed that the receipt of duty-paid goods for manufacturing final products fulfilled the requirements for availing Cenvat Credit, citing relevant case law to support this stance.

Ultimately, the Tribunal found no issues with the impugned order, dismissing the Revenue's appeal. The decision was based on the fulfillment of requirements for Cenvat Credit, the usage of duty-paid goods in manufacturing, and the precedent set by previous judgments supporting the respondent's position.