2012 (7) TMI 141

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..... to the period from 2nd March 2005 to 31st December 2005.   3. The assessee is engaged in the activity of decoiling of HR / CR coils by cutting and slitting them into specific sizes as per the design given by the buyer and further carried out the activity of pickling and oiling on the decoiled HR / CR coils. The assessee took credit of duty paid on HR / CR coils and utilized the said credit while paying duty on the decoiled HR / CR coils at the time of clearance. It is not in dispute that the duty paid on decoiled HR / CR coils is more than the duty paid on HR / CR coils (the credit of which was taken by the assessee). 4. On 4th April 2006, a showcause notice was issued to the assessee to the effect that the activity of decoiling the .....

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..... duty was payable on clearance of the decoiled HR / CR coils and consequently the assessee could not taken credit of duty paid on HR / CR coils. Merely because, the assessee had paid duty though not payable, it cannot be said that the credit of input duty has been correctly taken. It is contended that the assessee had applied to the Board seeking regularization of the credit which was wrongly taken, but the Board has rejected the request made by the assessee. In these circumstances, it is submitted that the CESTAT ought not to have interfered with the order passed by the authorities below. 8. We see no merit in the above contentions. As rightly contended by the representative of the assessee appearing in person, till 1st March 2005 the Rev .....

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..... f pickling does not amount to manufacture. Therefore, during the relevant period, that is, during the period from 2nd March 2005 to 31st December 2005, it could not be said that the issue was settled and that the assessee paid duty on decoiled HR/CR coils knowing fully well that the same were not manufactured goods. If duty on decoiled HR/CR coils was paid bona fide, then availing credit of duty paid on HR/CR coils cannot be faulted. 10. Apart from the above, in the present case, the assessment on decoiled HR / CR coils cleared from the factory of the assessee on payment of duty has neither been reversed nor it is held that the assessee is entitled to refund of duty paid at the time of clearing the decoiled HR / CR coils. In these circumst .....

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