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2018 (7) TMI 1667 - AT - Central ExciseCENVAT Credit - M.S. Round, G.I Steel Tubes & Pipes, M.S.Pipes, Black Pipes - denial on the ground that inputs have not been used for the manufacture of any finished goods, since the process undertaken by the assessee before clearing the goods, does not amount to manufacture - Held that - The issue is squarely covered by the decision in the case of THE COMMISSIONER OF CENTRAL EXCISE BANGALORE-V VERSUS M/S. VISHAL PRECISION STEEL TUBES AND STRIPS PVT. LTD. 2017 (3) TMI 1287 - KARNATAKA HIGH COURT , where it was held that When once duty is paid by the assessee treating the activity as manufacturing activity by the Department, CENVAT credit is available and there is no question of reversal of CENVAT credit - credit allowed - appeal dismissed - decided against Revenue.
Issues:
1. Classification of goods for Cenvat credit under Central Excise Tariff Act, 1985. 2. Application of Rule 3(5) of Cenvat Credit Rules, 2004. 3. Applicability of Rule 16(1) and 16(2) of Central Excise Rules, 1944. 4. Interpretation of various decisions by Hon'ble High Courts on Cenvat credit utilization. Analysis: Issue 1: Classification of goods for Cenvat credit under Central Excise Tariff Act, 1985 The respondent assessee, engaged in manufacturing Stainless Steel House Assemble and S.S. Bellow, took cenvat credit on specific items. The Revenue alleged that the items were classified under Chapter Heading 72 and 73, not Chapter 83 as claimed by the assessee. The Revenue contended that the inputs were not used for manufacturing finished goods, as the process undertaken did not amount to manufacture. However, the adjudicating authority found the cenvat credit lawful and dropped the duty and interest demands, refraining from imposing any penalty. Issue 2: Application of Rule 3(5) of Cenvat Credit Rules, 2004 The Revenue appealed the order, arguing that Rule 3(5) of the Cenvat Credit Rules was not applicable as the goods were cleared after cutting and were not in 'as such' condition upon receipt by the assessee. The Revenue contended that Rule 16(1) and 16(2) of the Central Excise Rules, 1944 were also not applicable in this case. Issue 3: Applicability of Rule 16(1) and 16(2) of Central Excise Rules, 1944 The respondent assessee, supported by the consultant, maintained that the adjudication order was sound, and there was no infirmity. They argued that the appeal by the Revenue should be dismissed, citing various decisions in support of their position. Issue 4: Interpretation of various decisions by Hon'ble High Courts on Cenvat credit utilization The Tribunal referred to decisions by different High Courts, including the Hon'ble High Court of Karnataka, Bombay High Court, and Gujarat High Court, which held that if the Cenvat credit was utilized for payment of duty on the final product, there was no need to reverse the credit even if the activity did not amount to manufacture. The Tribunal upheld the impugned order, dismissing the Revenue's appeal and disposing of the cross objection filed by the respondent assessee, based on the principles established by the High Courts. In conclusion, the Tribunal upheld the order, following the precedents set by various High Courts, and dismissed the Revenue's appeal while affirming the legality of the cenvat credit taken by the respondent assessee.
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