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TMI Blog2024 (6) TMI 1261X X X X Extracts X X X X X X X X Extracts X X X X ..... has chosen to pay the excise duty on the processed goods (whether it amount to manufacture or otherwise). The assessee cannot be denied the Cenvat credit. In the present case, it is seen that the appellant have already paid the amount in the form of excise duty which is equivalent to Cenvat credit availed. For this reason also the payment of duty by the appellant is as good as payment of Cenvat credit availed on the imported goods. Therefore, no show cause notice was required to be issued hence, the appellant had already made good by paying the duty which is nothing but reversal of Cenvat credit taken on the imported goods. Accordingly, neither any show cause notice was required nor the consequential interest and penalties is required to be recovered. The assessee can take the Cenvat credit even though their activity does not amount to manufacture and clear the same on payment of duty. Therefore, the entire transaction of the appellant is squarely covered by the provision of Rule 16 of Central Excise Rules, 2002 therefore, for this reasons the contention of the department that since no manufacturing activity is involved appellant is not entitled for the Cenvat credit, clearly fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper bag as- SHITAL INDUSTRIES PVT. LTD., PVC IMPACT MODIFIER, IM- 333. LOT NO: NET WT: 25 KGS And after receiving the material, they were stamping the similar details as mentioned above on the other sides of the bag. SHITAL INDUSTRIES PVT. LTD., PVC IMPACT MODIFIER, IM- 333. LOT NO: NET WT: 25 KGS 1.4 He stated that they were not doing any manufacturing process on the said material and even not opening the bag but they were printing their monogram also on the bags. They were availing input Cenvat credit (CVD+SAD) on the said imported PVC Impact Modifier . 1.5 The case of the department is that by doing activity as described above, it does not amount to levy or re-levy. therefore, activity does not amount to manufacture as per the Chapter note of Chapter 39 (previously under Chapter 29) of First Schedule of Central Excise Tariff Act, 1985. In absence of any manufacturing activity appellant was not entitled for Cenvat credit. Accordingly, the demand of Cenvat credit availed on the imported goods was proposed for the period 2010-11 to 2014-15. The Adjudicating Authority while adjudicating the show cause notice confirmed the demand and passed the following order:- (i) In terms of er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sultant appearing on behalf of the appellant submits that the activity of labeling on the other side of the Bag clearly covered under the chapter note of chapter 39 of Central Excise Tariff Act, 1985, according to which the said activity is amount to manufacture. Therefore, the appellant is entitled for the Cenvat credit. Alternatively, he submits that since, the appellant have been paying the duty on removal of relabeled imported goods, it is as good as payment of Cenvat credit. Therefore, no show cause notice could have been issued to the appellant. Accordingly, no consequential penalty and interest is recoverable. 2.1 He further submits that once the excise duty has been paid on the goods cleared even though at a later stage it is decided that the activity does not amount to manufacture the Cenvat credit on the inputs cannot be denied. He also submits that the demand has raised invoking the extended period of five years whereas there is no suppression of facts on the part of the appellant, as the appellant have been clearing goods on payment of duty and the same was declared on their monthly return. Therefore, the entire fact was known to the department and in absence of suppres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on made by both the sides and perused the records. We find that in the present case the appellant was denied the Cenvat credit in respect of imported goods on the ground that the appellant s activity subsequent to the import almost does not amount to manufacture. We are of the view that even without deciding the issue whether the activity carried out by the appellant is amount to manufacture or otherwise. This case can be decided on other issue. We find that the appellant have made a submission that even though there is no manufacture but the assessee has paid the excise duty, hence, the Cenvat credit on the imported goods cannot be denied. This issue has been settled in various judgments as follows:- (i) Ajinkya Enterprises v. CCE, Pune-III [2013 (288) ELT 247 (Tri.- Mum)], affirmed by the Hon ble Bombay High Court [2013 (294) ELT 203 (Bom.)]:- 9. We have seen from the facts of this case where as per Circular dated 7-9-2001, the activity of slitting of HR/CR coils into strip was amounted to manufacture. It is admitted fact that the said Circular was withdrawn on 2-3-2005. Thereafter, the appellants sought clarification through various letters to the department to clarify whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersal of credit is required as held by this Tribunal in the case of Repro India Ltd. (supra), Punjab Stainless Steel Industries (supra), Drish Shoes Ltd. (supra), SAIL (supra). In this case, it is admitted fact that the department has accepted duty paid by the appellants on their clearances and as per judicial pronouncement in the case of Ashok Enterprises (supra), Super Forgings (supra), SAIL (supra), M.P. Telelinks Ltd. (supra), Creative Enterprises (supra) which was upheld by the Hon ble Apex Court that once duty on final products has been accepted by the department in the case, CENVAT credit cannot be denied even if the activity does not amount to manufacture. 12. Therefore in view of the above discussion, we find that 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, following the various judicial pronouncements as discussed herein above, we hold that the appellants are not required to reverse the credit. Accordingly, the appeals are allowed with consequential relief. (ii) Commissioner of Central Ex. Cus., Surat-III v. Creative Enterprises [2009 (235) ELT 785 (Guj.)] as affi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered as utilised towards payment of duty on sale of such imported goods, credit reversal is not required. In that situation we hold that payment of duty on value addition on the inputs received by the appellant amounts to reversal of the CENVAT credit as demanded by the department in the show-cause notices. 4.1 From the above judgments, it can be seen that even though the activity does not amount to manufacture but if the assessee has chosen to pay the excise duty on the processed goods (whether it amount to manufacture or otherwise). The assessee cannot be denied the Cenvat credit. Notwithstanding anything observed above, we further find that the appellant have already paid the amount in the form of excise duty which is equivalent to Cenvat credit availed. For this reason also the payment of duty by the appellant is as good as payment of Cenvat credit availed on the imported goods. Therefore, no show cause notice was required to be issued hence, the appellant had already made good by paying the duty which is nothing but reversal of Cenvat credit taken on the imported goods. Accordingly, neither any show cause notice was required nor the consequential interest and penaltie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Central Excise or Commissioner of Central Excise, as the case may be], permit a manufacturer to remove excisable goods which are in the nature of semi-finished goods, for carrying out certain manufacturing processes, to some other premises and to bring back such goods to his factory, without payment of duty, or to some other registered premises and allow these goods to be removed on payment of duty or without payment of duty for export from such other registered premises.] RULE [16C. Special procedure for removal of excisable goods for carrying out certain processes. The [Principal Commissioner of Central Excise or Commissioner of Central Excise, as the case may be] may, by special order and subject to such conditions as may be specified by him, permit a manufacturer to remove excisable goods manufactured in his factory, without payment of duty, for carrying out tests or any other process not amounting to manufacture, to any other premises, whether or not registered, and after carrying out such tests or any such other process may allow, - a) bringing back such goods to the said factory without payment of duty, for subsequent clearance for home consumption or export, as the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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