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TMI Blog2023 (10) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... uty is found to be legal and correct and consequently, the appellant s cenvat credit cannot be denied. This issue has been considered time and again. In the case of COMMISSIONER OF CENTRAL EX. CUS., SURAT-III VERSUS CREATIVE ENTERPRISES [ 2008 (7) TMI 311 - GUJARAT HIGH COURT] , the Hon ble Gujarat High Court in the facts that whether the activity of the manufacturer amounts to manufacture or otherwise to arrive at a conclusion that whether the goods are dutiable and it was held that 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. Thus, it is settled that even if Excise duty is not payable on the product for any reason but the assessee paid the excise duty and said payment of duty is not challenged or questioned at the manufacturers end, no question can be raised as regard availment of the credit by the recipient of the goods. Accordingly, in the present case also, being the similar fact involved, the cenvat credit cannot be denied merely on the ground that the supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Ltd 2023 (7) TMI 943 Sunrise Containers Ltd. 2022 (11) TMI 792-CESTAT-AHM Hanon Automotives Systems India Pvt Ltd. 2022 (7) TMI 10 CESTAT AHM CCE vsHylite Cables 2007 (212) ELT 284 (Tri. Adm.) 3. On the other hand, Shri Ashok Thanvi, Learned Assistant Commissioner (authorized representative) appearing on behalf of the Revenue reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by both the sides and perused the records. We find that from the facts of the case and the detailed submission made by the learned counsel, it prima facie appears that Printing Cylinders received by the appellant duly duty paid is not exempted. Therefore, the entire basis of the department fails. However, without going into this issue in detail, we of the view that the appeal can otherwise be disposed of only on the ground that the assessment of the duty payment at the supplier s end has not been questioned or challenged by the jurisdictional departmental officer of the suppliers. As there is no evidence available on record that the payment of duty by the supplier was questioned/ challenged / disputed by their jurisdictional office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of a final product. Such goods were duty paid. Rules 3 and 4 of the Cenvat Credit Rules, 2004, thus would enable him to avail the Cenvat credit. It is a different thing that the supplier of the goods to the respondent paid excise duty on such product under mistaken belief. In law as declared by the Supreme Court in case of Collector of Central Excise, Patna v. Tata Iron and Steel Co. Ltd. (supra), no duty was payable on such product. Strictly speaking therefore, such amount deposited by the original manufacturer would not partake the character of excise duty. However, when the department did not dispute the classification of such manufacturer, accepted the declarations and duties, Cenvat credit on such duty cannot be declined to the purchaser of the goods who otherwise fulfilled all conditions tor availing Cenvat credit thereof. 9. Case is substantially similar to one before the Supreme Court in case of MDS Switchgear Ltd. (supra). In the said case, the Tribunal while accepting the department s allegation of inflation of the value of intermediate goods to load the assessable value, observed that if the department was of the opinion that the value of the final product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral for the appellant, submitted that the scheme of law is that if, excise duty is collected, a person at subsequent place is entitled to claim Modvat credit. According to Mr. Ferreira, learned Assistant Solicitor General, this can be so if, duty is validly collected at an earlier stage. In this case duty was not payable at all at the place outside Goa, since no duty can be levied on job work but only on manufacture and, therefore, the respondents are not entitled to claim any Modvat credit. Though this submission appears to be reasonable and in accordance with law, we find it not possible to entertain this submission in the facts of the present case since at no point of time the Revenue questioned the applicability of the excise duty at the place outside Goa. Those assessments have been allowed to became final and the goods have been removed from the jurisdiction of the Excise Officer at that place and brought to Goa. Now, in Goa it will not be permissible to allow the Revenue to raise the contention that the assessee in Goa cannot claim Modvat credit in Goa because duty need not be paid outside Goa. 6. As we have observed that the assessment is allowed to be final, it wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacture of the said final product (hereinafter, in this section, referred to as the inputs) . 4.A perusal of Section 57A(1) shows that the terminology used therein is paid and not payable . This distinction, in our opinion, is important because it indicates that we have to take into account the factual state of affairs. In other words, we have to consider whether the duty has actually been paid on the raw material and not whether duty was payable or not. In the present case, it is not in dispute that the assessee s supplier in fact that paid the duty on the raw materials supplied to the assessee and the department accepted this excise duty. The concept of Modvat is that if the raw material suffered duty then relief should be given so far as the excise duty on the final product is concerned. For instance, if a manufacturer of coat purchases cloth on which the manufacturer of cloth has paid excise duty say Rs. 20/-, then if the excise duty on the coat is say Rs. 100/-, the sum of Rs. 20/- has to be deducted from it and only Rs. 80/- is payable by the coat manufacturer. This is no doubt a rough and ready example but it illustrates the concept of Modvat. Since the very co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, passed the following order: The issue involved in the present case is that whether the respondent is entitled for Cenvat credit in respect of Excise Duty paid on capital goods namely Engraved Ms Copper Plated Rollers in a case where as per the department, the said Capital Goods were exempted from payment of Central Excise Duty under Notification No. 49/2006-CE dated 30.12.2006. The case of the department is that since the said Capital Goods were exempted from payment of Excise Duty under an unconditional Notification, the supplier was not supposed to pay the duty, whatever duty was paid cannot be treated as Excise Duty in terms of Section 3 of Central Excise Act,1944. Consequently, the respondent cannot take credit of any amount which is not a payment of duty in terms of Section 3, the department also placed reliance on the Circular No. 940/01/2011-CX dated 14.01.2011 though the Adjudicating Authority has denied the Cenvat Credit but Learned Commissioner (Appeal), in appeals filed by the respondent allowed the appeal therefore the present appeal filed by the revenue. The respondent also filed a cross objection. 2. Shri Tara Prakash, Learned Deputy Commissioner (AR), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Central Excise, Chandigarh vs. Ranbaxy Labs Ltd. reported in 2006 (203) E.L.T. 213 (P H) GTL Infrastructure Ltd. vs. Commissioner of Central Excise, Mumbai reported in 2016 (45) S.T.R. 389 (Tri. - Mumbai) 3.1 Without prejudice he also submits that appellants goods are not exempted, as the exemption was rescinded vide Notification No.19/1996-CE dated 23.07.1996 by the changes as per the Union Budget of 1996-97. For this reason also the entire allegation of the department is incorrect. Hence the credit on that count also cannot be denied. 3.2 He further submits that the recipient of the goods is entitled to avail Cenvat credit of the duty paid by the supplier manufacturer as long as it is not proved that the duty paid by the supplier manufacturer was refunded to them. In this support he placed reliance on following judgment: Commissioner of C. Ex., Vadodara - I vs. Hylite Cables, 2007 (212) E.L.T. 284 (Tri.- Ahmd.) Evergreen Engineering Co. Pvt. Ltd. vs Commissioner of C. ex., Mumbai reported in 2007 (215) E.L.T. 134 (Tri. - Mumbai) 3.3 He further submits that the Show Cause Notice for the period of October-2008 to July-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se holding that the process followed by the Revenue from the issue of show cause notice to the determination of the liability is not based on relevant law. 2. M/s. MDS Switchgear Ltd., D-4, MIDC, Jalgaon (hereinafter referred to as the assessee ) and M/s. MDS Switchgear Ltd., A-2, MIDC, Malegaon Village, Sinnar (hereinafter referred to as the supplier ) are the sister concerns and are engaged in the manufacture of circuit-breakers falling under Chapter Heading No. 85 of Central Excise Tariff Act, 1985. They were also availing of Modvat facility under the Central Excise Rules, 1944 (for short, the Rules ) 3. The assessee was receiving tripstar MCB s single pole of various configurations from their unit at Sinnar in semi-finished condition. After carrying out certain operation, they have cleared the goods at lower value than the landing cost of semifinished received from their unit, viz., MDS Switchgear, Malegaon, Sinnar. The Revenue, after a detailed verification of record, came to the conclusion that the cost of semi-finished goods supplied by their sister concern is arrived at by adding the raw material cost, direct/indirect labour cost, average overheads, notional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Commissioner to convert a part of the duty so paid into deposit of duty . There is no legal basis for such presumption. The rules entitled the receipt manufacturer to avail of the benefit of the duty paid by the supplier manufacturer. A quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be contested or challenged by the officers in charge of recipient unit *2000 (38) RLT 179+. 8. Counsel appearing for the Revenue could not assail any of the findings recorded by the Tribunal. 9. That being the position, we agree with the view taken by the Tribunal and find no merit in these appeals which are dismissed leaving the parties to bear their own costs. (b) The Hon ble Gujarat High Court dealing with the identical issue in the case of Creative Enterprises (Supra) passed the following order: Originally when the appeal was filed, the following question was proposed by appellant-revenue. (a) Whether in the facts and circumstances of the case, the Tribunal is justified in holding that the respondent could have availed of Modvat credit in respect of the goods which could not undergo the process of manufacture within the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, I find that the appellant had received the goods in bulk, carried out testing/ inspection, packed in smaller containers with automatic machinery, followed the rules and procedure strictly and cleared the goods on payment of duty. The expression manufacturer has been defined in Section 2(f) of the C. Ex. Act, 1944, according to which it includes any process- (i) Incidental or ancillary to the completion of a manufactured product, and (ii) which is specified in relation to any goods in the Section of Chapter Notes of the Schedule to the Central Excise Act, 1985 as amounting to manufacture. The aforesaid definition endows a wider content to the expression manufacture as several process which would not ordinarily be understood as amounting to manufacture are specifically included therein, held by the Apex Court in the cases of Prestige Engg. (I) Ltd. v. Collector - 1994 (73) E.L.T. 497 (S.C.) and Collr. v. S.D. Fine Chemicals P. Ltd. - 1995 (77) E.L.T. 49 (S.C.). In the appellant s case, though the process involved is of repacking, but repacking with conscious and specific end-use in view. In other words, repacking makes the products marketable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal Stamp No. 815 of 2004 which came to be disposed of on 20-7-2004 for non-removal of office objections. Till date, no steps have been taken to have the said appeal restored to file. 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 the aforesaid set of facts and circumstances of the case in light of concurrent findings of fact recorded after appreciating the evidence on record by both Commissioner (Appeals) and the Tribunal, no question of law, much less a substantial question of law, arises out of impugned order of Tribunal. The appeal is accordingly dismissed. 4.2 The above judgment of Hon ble Gujarat High Court has been affirmed by the Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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