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TMI Blog2012 (7) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of its user as also the thickness and lamination falling within the definition of manufacture as defined under Section 2(f)- The department having accepted the excise duty on the final product cannot be permitted to deny cenvat credit on the inputs used for the manufacture of the final product on a technical plea of department - decided in favour of assessee. - Excise Appeal No. 1644 of 2009, 45 of 2010, 3059 of 2009, 3036 of 2009 - - - Dated:- 14-6-2012 - Sh. Justice Ajit Bharihoke, Sh. Rakesh Kumar, JJ. Present Shri S.S. Dabas, Advocate for the appellant. Present Shri Bharat Bhushan, AR for the respondent. Per. Justice Ajit Bharihoke: 1. By this order we propose to dispose above referred four appeals involving common question of law and facts. i) In Excise Appeal No.1644 of 2009-Ex, the appellant M/s Markwell Paper Plast Pvt. Ltd. has challenged the order-in-original dated 29.04.2009 of Commissioner (Adjudication) whereby for the period w.e.f. April 2007 to February, 2008 the adjudicating authority disallowed the cenvat credit availed by the appellant and confirmed the demand of Rs.63,74,221/- with interest and also imposed penalty of Rs. 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants since inception of the aforesaid business. 5. the appellants availed of cenvat credit on the duty paid inputs used in manufacture of the final product and has always been filing returns as prescribed under the Central Excise Rules, 2002 and Cenvat Credit Rules, 2004. 6. The department in view of the judgement of the Supreme Court in the matter of Metlex (I) Pvt. Ltd. vs. CCE, New Delhi reported in 2004 (165) ELT 129 (SC) felt that aforesaid process of printing and laminating the bare polyester / metalised film did not amount to manufacture. Consequently, show cause notices were issued to the respective appellants mentioned above proposing to disallow cenvat credit availed by them in respect of duty paid inputs on the premise that the process carried out by the appellants for bringing about the final product did not amount to manufacture. 7. The above said three appellants respectively contested the show cause notices issued to them and explained that process carried out by them to bring out the final product amounted to manufacture within the definition of Section 2(f) of the Central Excise Act, 1944. They also claimed that since they have cleared their final prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid process does not amount to manufacture whether or not the department is justified in disallowing the cenvat credit availed by the appellants on duty paid inputs for the manufacture of their final product which was cleared on payment of excise duty? 13. Shri S.S. Dabas, ld. Advocate appearing for the appellant has contended that the impugned order is based upon the incorrect reading of the judgment of Supreme Court in the matter of M/s Metlex (I) Pvt. Ltd. (supra). In support of this contention, ld. Counsel has drawn our attention to the judgement of the Supreme Court particularly paras 16 and 17 and submitted that the Commissioner (Adjudication) has failed to appreciate that Supreme court after noting the plea of the department for remand of the matter back for decision whether there was manufacture, dismissed the plea by observing that the assessee in response to the show cause notice took up the plea that there was no manufacture and if the department still wanted to contend that manufacture have been undertaken the department was required to prove it by cogent evidence. From this, ld. Counsel contend, it is obvious that the finding of the Supreme Court in the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgement of the Supreme Court in the matter of M/s Metlex (I) Pvt. Ltd. (supra) wherein it has been held that mere lamination of metilisation of a bare film does not bring about a new product and as such the process cannot be termed to be manufacture. Thus, it is contended that the Commissioner has rightly disallowed cenvat credit to the appellant. As regards the second issue, ld. AR has drawn our attention to Section 5(b) of the Central Excise Act, and Notification No. 22/2008-CE (NT) dated 02.05.2008 issued under the said provision and submitted that in view of the aforesaid notification non reversal of cenvat credit in these cases could have been allowed only upto 12.02.2004 and not thereafter. Thus, he contends that the plea of ld. Counsel for the appellant is without merit and there is no reason to interfere with the impugned orders. 18. We have considered the rival contentions and perused the record as well as the judgement relied upon by respective parties. On reading of the respective order-in-originals, it is evident that the Commissioner (Adjudication) has based his finding on the judgement of Supreme Court in the matter of Metlex (I) Pvt. Ltd. (supra). Therefore, in o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cast the burden on the assessee to show that there was no process of manufacture. From this observations, it is clear that the appeal of the assessee was allowed by the Supreme Court on facts because of the failure of the department to establish that the goods in question came into existence through a manufacturing process. That being the case in our considered view the judgement of Supreme court in Metlex (I) Pvt. Ltd. cannot be applied universally de hors the facts. Whenever the question arises whether or not the product in question came into being from a process of manufacture the adjudicating authority is require to refer to the facts of the case to come to the conclusion as to whether the process amounted to manufacture or not. In the instant case the Commissioner (Appeals) has not cared to look into the process through which the finished goods were cleared by the manufacturing assessees emerge out of the process of manufacture. 20. The manufacturing appellants have explained the process of production of their final products as follows:- (i) Printing of bare and metalised polyester film which is purchased from the market on payment of duty; (ii) Lamination of said printe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is assumed that the final products cleared by the manufacturing appellants emerged from a process not amounting to manufacture then also we find it difficult to sustain the impugned order for following reason:- Undisputedly, the appellants used duty paid inputs for the production of their final product which was cleared to the customers on payment of excise duty. Admittedly, the department accepted the excise duty on the final product without any protest nor the appellants were informed that their final products was not subject to excise duty as it emerged from the process not amounting to manufacture as defined under Section 2(f) of the Central Excise Act. Learned Counsel for the respondent department has tried to justify the impugned order disallowing the cenvat credit availed by the appellant on the inputs on the plea that the final product has not emerged from the process which could be termed as manufactured. Such an argument, in our view cannot be sustained as it is against the tenets of equity and justice. The department having accepted the excise duty on the final product cannot be permitted to deny cenvat credit on the inputs used for the manufacture of the final produ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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