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TMI Blog2019 (8) TMI 1834X X X X Extracts X X X X X X X X Extracts X X X X ..... pitch from coal tar by the process of distillation. Heavy Creosote Oil is obtained as a by-product during the process of distillation, which is further processed and treated with furnace oil in order to manufacture 'fuel oil' classifiable under chapter 27101950 of the Central Excise Tariff. The proportion of furnace oil required to be used to manufacture fuel oil varies according to the quality of Heavy Creosote Oil. The above mentioned goods (inputs) are mixed and heated slowly in a distillation process, wherein the temperature is raised to about 130 degree Celsius. After the said process, the resultant product is obtained i.e. Fuel Oil which has high calorific value of around 10,200-10,400 Kcal/Kg with low sulphur content and low viscosity. Based on the investigation and statements obtained from the buyers, Show Cause Notice dated 23.02.2012 (SCN) was issued by invoking extended period of limitation for the period from February 2007 to March 2008, wherein it was alleged that appellant availed and utilised inadmissible Cenvat credit to the tune of Rs.2,16,71,185/- on 'furnace oil' by deliberately mis-declaring the process of 'mixing and blending' as manufacture of 'fuel oil'. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein it is observed that if activity undertaken by the assessee does not amount to manufacture, CENVAT Credit cannot be denied if duty is already levied on final product. He further relied on catena of decisions in similar lines in the case of CCE, Bangalore v. Vishal Precision Steel Tubes & Spirits Pvt. Ltd. 2017 (349) ELT 686 (Kar.), Hino Motors Sales India Pvt. Ltd. v. CCE, Thane-I 2014 (299) ELT 49 (Tri-Mum.), Uttam Galva Steels Ltd. v. CCE, Raigad 2016 (336) ELT 81 (Tri-Mum.), Parle Biscuits Pvt. Ltd. v. CCE, Rohtak 2014 (312) ELT 397 (Tri-Del.) wherein similar views have been taken. 4.4 The Learned CA also submitted that availment of credit cannot be disputed at the recipient assessee's end when payment of duty / tax has not been disputed at the supplier's / vendor's end. He placed reliance on the decision of the Hon'ble Punjab and Haryana High Court in the case of CCE, Chandigarh vs. Ranbaxy Labs Ltd 2006 (203) ELT 213 (P&H), wherein the Hon'ble High Court held that if the duty was legally not payable, credit cannot be denied to the recipient of goods when admittedly the duty has been collected by the Revenue. He also relied on the decisions in case of S.K. Industries v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken for obtaining fuel oil. At the outset, we have perused the letter dated 01.02.2006 duly enclosed in appeal paper book as also recorded by the Ld. Commissioner in Para 2.7 of the impugned order, that the assessee had duly informed the department about manufacture of the goods, namely 'Fuel Oil' and that the appellant shall avail cenvat credit against such inputs to be utilised for manufacture of Fuel Oil. Therefore,the fact regarding availment of duty credit on furnace oil was always in the knowledge of the department.This clearly shows that there was no mala fide intention on the part of the appellant to misuse the benefit of Cenvat Credit as wrongly observed by the Ld. Commissioner. Moreover, we find that the assessee has duly shown the availment of credit in ER-1 returns which fact is not in dispute. The Tribunal in CCE v. ITC Ltd. 2013 (31) taxmann.com (Kol-CESTAT) has observed that if the assessee has disclosed availment of CENVAT Credit in ER-1 returns, suppression of facts cannot be alleged and demand beyond normal period is not sustainable. Relevant extract of the above decision is as below: "5. Heard both sides and perused the records. The limited issue involved in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by invoking extended period of limitation for duty demand for the period February 2007 to March 2008 is hopelessly barred by limitation. 8. On merits also, we find force in the submission of the appellant that even if it is assumed that the process undertaken by the appellant did not amount to manufacture, the question of levy of duty on the final product did not arise and therefore, no duty demand is sustainable otherwise also. In this regard, we take note of the decision of the Hon'ble Gujarat High Court in CCE v. Creative Enterprises (Supra), as relied by the appellant, the relevant part of which is extracted below: "6. When one goes through the order of the first appellate authority, it is apparent that the respondent has been held to be a manufacturer as defined in Section 2(f) of the Central Excise Act, 1944. The appellate authority has taken into consideration the activities carried on by the respondent-assessee. The Tribunal is justified in holding that if the activity of the respondent-assessee does not amount to manufacture there can be no question of levy of duty, and if duty is levied, Modvat credit cannot be denied by holding that there is no manufacture. 7. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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