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TMI Blog2013 (6) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner has also considered the representation of the appellant and forwarded to the Board for issuance of the required notification. The Board has neither rejected the proposal of the Commissioner, nor issued the notification for regularization of credit availed. In that situation, we are of the view that the benefit of the Circular No. 911/1/2010-CX., dated 14-1-2010 is available to the appellants. As per Rule 3(5) of the Cenvat Credit Rules, 2004, if the activity in question of the appellants does not amount to manufacture, the appellants are required to pay duty equal to credit taken on clearance of such inputs under cover of Central Excise invoices. As in this case, the activity of the appellants does not amount to manufacture, therefore, these inputs are cleared as such. In that event, as per Rule 3(5) of Cenvat Credit Rules, 2004 the appellants are required to pay duty equal to the credit taken thereon and the appellants have paid duty more than the credit availed. The duty paid by the appellants has been accepted by the department which is admittedly more than the CENVAT credit availed by the appellants. Therefore, we hold that the appellants are not required to reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt to manufacture. For the said reasons, rebate of duty paid on the goods supplied to SEZ unit was also denied. In some of the appeals, adjudicating authority had sanctioned the refund of Cenvat credit attributable to goods supplied to SEZ Unit but the same were appropriated against the denial of credit and the same, on challenge by Dept., were accepted by Commissioner (Appeals). 2.4 Hence these appeals. 3. Ld. Advocate appearing for the appellants submits as under :- (A) By their letters dated 1-11-1996, 8-4-2005, 13-6-2005, 21-6-2005, 13-3-2006, etc., the appellants have been persistently in correspondence with the Department requesting to finally clarify whether the composite activity of de-coiling and cutting slitting, pickling and oiling amounted to manufacture or not. The appellants stand had been that C.B.E. C., vide Circular No. 584/21/2001-CX., dated 7-9-2001, had clarified that slitting of HR/CR coils or iron and steel sheets into strips amounted to manufacture. The Circular was withdrawn by C.B.E. C. vide its Circular No. 811/8/2005-CX., dated 2-3-2005 in view of Delhi HC judgment in Faridabad Iron Steel Traders Association. [2004 (178) E.L.T. 1099 (De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C., vide its Circular dated 14-1-2010, the appellants also have taken steps by making representation dated 7-9-2010 to the Commissioner for issue of Notification under Section 5B and the Commissioner by his letter issued from F.No. VGN(30)75/Ajinkya/10-11 dated 7-10-2010 has recommended for issue of Notification under Section 5B. However, the Advocate prayed for decision on the merits. (D) The appellants had the following legal alternatives : (i) Since the appellants are manufacturing press metal parts and also undertaking the aforesaid disputed activity, inputs being common, the appellants case would be covered by sub-rule (5) of Rule 3 of CCR, 2004 whereunder, the appellants were required to pay duty equal to credit taken and clear such inputs (steel sheets duly pickled and oiled) under the cover of central excise invoices. In the present case, the appellants have paid duty more than the credit taken and cleared such goods under the cover of central excise invoices and hence, their case is covered under Rule 3(5) of CCR. (ii) Rule 16 of CER, 2002 permits taking credit of duty paid on the goods brought to any factory for being re-made, refined, reconditioned or for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants contention that when duty paid at the time of clearance is equal to or higher than the credit availed, the same is to be treated as reversal of credit and hence, no further reversal of credit required, reliance was placed on the following judgments : 1. Crompton Greaves Ltd. - 2008 (230) E.L.T. 488 (T) 2. Vickers Systems International Ltd. - 2008 (229) E.L.T. 298 (T) = 2008 (10) S.T.R. 378 (T) 3. PSL Holdings Ltd. - 2003 (156) E.L.T. 602 (T) 4. Shetron Ltd. - 2001 (135) E.L.T. 736 (T). (H) Once duty on the final products has been accepted by the Dept., credit is not deniable, even if the activity does not amount to manufacture, based on the following judgments : 1. Ashok Enterprises - 2008 (221) E.L.T. 586 (T) 2. Super Forgings - 2007 (217) E.L.T. 559 (T) 3. S.A.I.L - 2007 (220) E.L.T. 520 (T) = 2009 (15) S.T.R. 640 (T) 4. M.P. Telelinks Ltd. - 2004 (178) E.L.T. 167 (T) 5. Stumpp Scheule - 2005 (69) RLT 786 (T) = 2005 (191) E.L.T. 1085 (T) 6. Shivali Udyog (I) Ltd. - 2006 (204) E.L.T. 94 (T) 7. Heat Shrink Technologies Ltd. - 2007 (220) E.L.T. 437 (T) 8.1 Creative Enterprise - 2009 (235) E.L.T. 785 (Guj.) 8.2 Upheld by Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s permissible in view of use of the expression any goods , excisable goods etc. therein. (M) Para 1.2 and Para 1.3 (Part VI of Chapter 7) and Para 1.2 and Para 1.3 (Part V of Chapter 8) of C.B.E. C. s Excise Manual it has clarified that Rules 18 and 19 would apply to excisable goods (dutiable or exempt) as well as non-excisable goods. According to said Manual, materials is permitted to be used for manufacture or processing. In other words, any processing not amounting to manufacture (such as packing, blending etc.) would be eligible for the benefit under Notifications issued under Rules 18 and 19 of CER. (N) It is the settled position of law that credit of Cenvat is admissible on the inputs used in exempt goods exported, based on the following judgments of Hon ble Bombay High Court, Delhi High Court, Himachal Pradesh High Court and Tribunal : (i) Repro India Ltd. v. UOI - 2009 (235) E.L.T. 614 (Bom.) (ii) Punjab Stainless Steel Industries v. CCE - 2008 (226) E.L.T. 587 (T) (iii) CCE v. Punjab Stainless Steel - 2009 (234) E.L.T. 605 (Del.) (iv) CCE v. Drish Shoes Ltd. - 2010 (254) E.L.T. 417 (H.P.) (v) Arvind Mills v. CCE - 2009 (240) E.L.T. 613 (T) (O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vat taken is to be paid under Rule 3(5) of CCR, or duty on transaction value is payable when the activity undertaken did not amount to manufacture. Rather in that case, differential duty was demanded, as the assessee therein had paid less duty by paying duty on transaction value while the credit taken on inputs was higher. As against, in the present case, duty paid by appellants is higher than the credit taken. Therefore the ratio of that judgment would not have any relevance. (b) That the ratio in P.V. Sanghvi (supra) does not apply, as, in that case the issue as to whether mere process of pickling and annealing would amount to manufacture or not was decided, while in the present case, a composite process of de-coiling, cutting slitting, pickling and oiling process were undertaken and in spite of repeated representations, Dept. clarified only on 24-6-2010. (c) That the issue in Metlex (I) Pvt. Ltd. (supra), was whether assessee is barred from taking a plea of not amounting to manufacture when he had paid duty on the mistaken belief of activity amounting to manufacture and the Supreme Court permitted to take that plea and hence, would not be relevant. (d) That the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re than the duty paid. Therefore, differential duty was asked to be paid. Therefore, we are of the view that the ratio laid down in the decision of Velere Power India (supra) supports the case of the appellant. This is not the fact in this case before us. 8. In the matter in hand before us, the appellants have paid more duty than the credit availed after value addition. Therefore, the decision of Velere Power India (supra) is not relevant to facts of this case. The learned SDR also relied on the decision of Metlex (I) Pvt. Ltd. (supra), wherein the Apex Court has held that merely because the party mistakenly filed the classification list, does not mean that he had to pay duty, even if he is not bound to pay duty. If there is no manufacture then mere the fact that the classification list has been filed would not make them liable to pay duty. We have seen the decision of Metlex (I) Pvt. Ltd. (supra). In that case the facts are that the assessee wrongly filed their classification list on the ground that their activity amounts to manufacture and paid duty thereon. The Hon ble Apex Court held that this does not bar them when their activity, does not amount to manufacture and they hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly on 24-6-2010 saying that the said activity does not amount to manufacture. Therefore, following instructions issued through Circular No. 911/1/2010-CX., dated 14-1-2010, the appellants approached to the Commissioner for issuance of appropriate rectification for regularization of the CENVAT credit availed as their activity does not amount to manufacture and they have paid duty on clearance of the goods more than the credit availed. The Commissioner has also considered the representation of the appellant and forwarded to the Board for issuance of the required notification. The Board has neither rejected the proposal of the Commissioner, nor issued the notification for regularization of credit availed. In that situation, we are of the view that the benefit of the Circular No. 911/1/2010-CX., dated 14-1-2010 is available to the appellants. 10. Further, it is the admitted fact that the appellants are the manufacturer of excisable goods also. Therefore, as per Rule 3(5) of the Cenvat Credit Rules, 2004, if the activity in question of the appellants does not amount to manufacture, the appellants are required to pay duty equal to credit taken on clearance of such inputs under cover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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