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TMI Blog2024 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... stablish the receipt and transfer of inputs and its proper use at Unit B-165 to the satisfaction of the authority. In these circumstances, there is no justification for denial of the cenvat credit of Rs.72,97,860/- merely because necessary permission was not obtained for clearance of finished goods on payment of duty from Unit B-165 , instead of bringing it back to their Unit at B-59. CENVAT credit of Rs.18,24,719/- availed on inputs that were used in the manufacture of finished goods was denied on the ground that the process of conversion of inputs into final products does not amount to manufacturer - HELD THAT:- This issue has been considered by this Tribunal in their own case and it has been observed that the process viz. drilling, burr removal, grinding, blackening etc. as per the specification of customers undertaken by the appellant result into the emergence of a new product having distinct identity, use and hence amount to manufacture, vide Final Order [ 2023 (10) TMI 958 - CESTAT BANGALORE ]. Thus, the credit on this count is also admissible. Admissibility of cenvat credit of demand of Rs.5,60,978/- on rejected goods - HELD THAT:- Credit cannot be denied merely on the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner in the impugned order confirmed the demand with interest and penalty. Hence, the present appeal. 3.1. At the outset, the learned Senior advocate for the appellant has submitted that they have two units, i.e. No.B-59 situated at 2nd Cross, 1st stage, Peenya Industrial Estate, Bangalore and the second one bearing No.B-165, situated in 3rd Cross, 1st Stage, Peenya Industrial Estate, Bangalore. They have been issued with a show-cause notice for recovery of cenvat credit amounting to Rs.72,97,860/- availed on inputs at B 59 for manufacture of hand primers and fuel filters but since these were not used in the manufacture of finished goods in the factory but cleared to other unit B-165 under Delivery Challans/ issue slips, where it is used for manufacture of hand primers and fuel filters, later cleared on payment of duty. Further, it is alleged that they have availed credit of Rs.18,24,710/- on inputs which were in almost finished stage and since no activity of manufacture has been undertaken on the said inputs, credit availed was irregular. Also, it has been alleged that they have availed credit of Rs.5,60,978/- irregularly i.e. (i) invoices addressed to the appellant Unit B-59, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envat credit alleging that the inputs have not been used in the production of finished goods is unsustainable. He has submitted that only because they did not obtain permission to clear the finished goods from B-165 manufactured on job work basis, the credit availed on inputs cannot be denied. 3.3. With regard to denial of cenvat credit of Rs.18,24,710/- on inputs which were subjected to processes of drilling, burr removal, grinding, blackening etc. on the ground that the said activities do not amount to manufacture, the learned advocate has submitted that this issue has been decided by the Tribunal with reference to the unit at B-165 vide Final Order No.21148/2023 dated 20.10.2023. Therefore, the demand on this account is unsustainable; hence, to be set aside. 3.4. With regard to the demand of Rs.5,60,978/-, the learned advocate has submitted that the demand is based simply on the fact that the invoices under which the inputs were received contain the acknowledgement seal of Unit B-165 at the time of receipt whereas the invoices were addressed to Unit B-59 and cenvat credit was taken in Unit B-59. Certain goods were rejected by M/s. Reva Electric Co. Pvt. Ltd. and consigned to Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the other unit at B-165 but admissibility of cenvat credit availed on the inputs which have not been used in relation to manufacture of the final goods at B-59. It is submitted that they have admitted that cenvat credit on inputs has been availed and cleared to their other unit B-165 without payment of duty /reversal of credit and Annexure-II challan for jobwork which have not been declared to the Department. Also, it is claimed that they have cleared inputs on payment of duty from the unit B-165 but no permission was availed for clearance from the job worker s premises. Further, he has submitted that benefit of Notification No.214/86-CE is a conditional notification and cannot be available to the appellant in the present case as no procedure has been followed nor any declaration has been submitted by them to the jurisdictional authority. Further, he has submitted that the appellant are required to clear the goods under valid invoices on payment of duty if they had manufactured goods /semi-finished goods and were obliged to reverse the cenvat credit availed on inputs in terms of Rule 3(4) of Cenvat Credit Rules if such inputs have been cleared as such since the appellant failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arguing in support of the admissibility of the credit availed on inputs received in their factory and later transferred to their other Unit B-165 having separate Central Excise registration, amounting to Rs.72,97,860/-, it is submitted that the inputs received in their factory at B-59 were transferred against proper delivery notes/ challans after recording their receipt in their input stock register to their unit at B-165 for further processing and cleared finished goods for export and/or on payment of duty thereafter from the said unit. To establish the claim of transfer of inputs from Unit B-59 to Unit B-165 through challans and receipt of inputs at Unit B-165 and further processing, the appellant had enclosed relevant Dispatch / delivery notes along with Annexure-II Challans pertaining to the relevant period and the monthly raw materials consumption statement along with monthly summary for each of the month from December 2004 to July 2005 at their unit B-165, with their written submission dated 03.06.2024. Also, they have enclosed summary of receipts and consumption of inputs for the period December 2004 to July 2005 at their Unit B-165 vis-a-vis production of finished goods at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e specification of customers undertaken by the appellant result into the emergence of a new product having distinct identity, use and hence amount to manufacture, vide Final Order No.21148/2023 dated 20.10.2023. Thus, the credit on this count is also admissible. 9. On the issue of admissibility of cenvat credit of demand of Rs.5,60,978/- on rejected goods, it has been submitted that certain goods were rejected by M/s. Reva Electric Co. Pvt. Ltd. and consigned to their Unit at B-59 against invoice No.475 dated 28.03.2005, erroneously the seal of Unit at B-165 was affixed on the returned invoice but the credit was availed at Unit B-59 and goods were reprocessed and cleared to Reva Electric Co. Pvt. Ltd. under Invoice No.11001 dated 04.04.2005 and No.11018 dated 15.04.2005 on payment of duty. Further, they have referred to the submission advanced before the learned Commissioner on 23.10.2007 enclosing therewith the details of the rejected/returned goods which have been processed and later cleared on payment of duty with relevant invoices indicate that the rejected goods were, after processing, removed from the factory on payment of duty. Thus credit cannot be denied merely on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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