9911796707
TMI Blog2024 (12) TMI 1453X X X X Extracts X X X X X X X X Extracts X X X X ..... edabad, while passing Order No. A/11707/WZB/AHD/2013; dated 4th December, 2013, is right in allowing the Cenvat Credit of duty of inputs which were not used to manufacture a new excisable goods? 2. Whether the Hon'ble Customs, Excise and Service Tax Appellate Tribunal (CESTAT), West Zonal Bench, Ahmedabad, was right in law in disallowing the demand of the Department for Cenvat Credit duty wrongly availed of by the assessee Under Rule 14 of the Cenvat Credit Rules, 2004, on the ground that it is against the tenets of Equity and Justice?" 4. The respondent assessee was engaged in the manufacture of excisable goods falling under Chapter Nos. 72 and 85 to the First Schedule to the Central Excise Tariff Act, 1985 (For short "the Act of 1985"). The respondent assessee was also availing Cenvat Credit facility as provided under Cenvat Credit Rules, 2004 (For short "the Rules"). 5. The respondent assessee was importing CRGO coils having width of more than 600 mm falling under Chapter CETSH No. 7225 1100 of the Act of 1985 and was availing Cenvat Credit of the duty paid on the same. 6. CRGO coils imported by the assessee was subjected to reduction of width by carrying out the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order referring to the decision of Hon'ble Bombay High Court in case of Commissioner of Central Excise, Pune-III v. Ajinkya Enterprises reported in 2013 (294) E.L.T. 203 (Bom.) as well as decision of Delhi Tribunal in case of Markwell Paper Plast Pvt. Ltd. v. Commr. Of Cus. & C. Ex., Noida reported in 2012 (285) E.L.T. 76 (Tri-Del), held in favour of the assessee by observing as under: "4. Heard both sides and perused the records. It is observed that admissibility of Cenvat credit on slitting of CRGO coils cleared is no more res integra and has been decided by the Mumbai Bench of Tribunal in the case of Ajinkya Enterprises vs. Commissioner of Central Excise., Pune-III (supra) which has been upheld by the Hon'ble High Court of Mumbai. Secondly, it is also observed that the duty paid by the appellant has been accepted by the department and nothing has been brought to out notice that the appellant was asked by the Revenue at any stage for not paying Central Excise duty when process did not amount to manufacture. In this regard, appellant has correctly placed reliance on the judgment of the Tribunal in the case of Markwell Paper Plast Pvt. Ltd. vs. Commissioner of Cus. & C.Ex., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit on imported CRGO coils having width of 600mm as no manufacturing process was carried out on the said CRGO coils in the factory except reduction of width of coils which does not amount to manufacture. 12. Reliance was also placed on Rule 2 (k) of the Rules read with Rule 2 (h) and Rule 3 of the Rules. It was submitted that merely because the assessee has paid the excise duty under the provisions of the Act, Cenvat Credit cannot be claimed under the provisions of the Rules and therefore, the assessee is entitled to reverse the credit as per Rule 14 of the Rules. 13. On the other hand, learned advocate Mr. Paresh M. Dave appearing for the respondent assessee submitted that the Tribunal after following the decision of Bombay High Court in case of Ajinkya Enterprises (supra) as well as the decision of Bombay Tribunal in the said case of the said assessee has held that assessee is entitled to Cenvat credit. 14. Reliance was placed on reply dated 10.04.2010 submitted by the assessee before the adjudicating authority wherein it was contended that the assessee has availed Cenvat credit of duties paid on CRGO coils and has paid much higher amount as excise duties on the final produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iagaraja Engineering Enterprises v. Assistant Collector of Central Excise, (1997) 10 SCC 241. 3. Against the order made by the adjudicating authority, the respondent assessee carried the matter in appeal and the first appellate authority allowed the appeal after recording following facts. "4. I have examined the records of the case and the submissions made in memorandum of appeal as well as at the time of personal hearing. The issue for determination is whether the activity of repacking from bulk packs to lower packs amounts to manufacture within the meaning of Section 2 (f) of the Central Excise Act, 1944 or not. I find that the appellant has received "Elmo Luft 1A' falling under CSH No. 3208.40 in bulk packs from Dr. Bex & Co. (I) Ltd. And with the help of special purpose machines prepared small marketable packages and cleared the same on payment of duty under cover of invoice. The department had granted the C.Ex., registration to the appellant. 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 goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in respect of the same issue and in the same assessee's case, the Tribunal has held that the assessee cannot be denied the Modvat credit. Vide final order No.CB/470/03WZB dated 28.10.2003, the Tribunal held as under: 'We have perused the records and have considered the submissions made by both sides. The present order is clearly unjust and cannot be allowed to stand. The appellants are right in their contention that the finding regarding manufacture applies equally to levy of duty as well as eligibility to Modvat credit. It there was no manufacture, there could be no payment of duty also. There is no dispute that the appellants had paid a higher amount of duty on the goods than the credit taken. If the credit taken was not eligible, what was required was only to adjust the duty paid against that credit." 5. It is necessary to take note of the fact, to complete narration of facts, that the earlier order of Tribunal was challenged by way of Tax 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the circular dated March 2, 2005, is justified in calling upon the assessee to reverse the credit or pay the amount to the extent of the credit liable to be reversed, with interest and penalty ? 9. It is relevant to note that the Board in its circular dated September 7, 2001 had only held that the activity of cutting/slitting of HR/CR coils into sheets or strips constitutes manufacture. Admittedly, the assessee had carried on additional activities such as pickling and oiling on the decoiled HR/CR coils, which is a complex technical process involving huge investment in plant and machinery. Since these additional activities were not considered by the Board in its circular dated September 7, 2001, the withdrawal of the said circular cannot be a ground to hold that the activity carried on by the assessee did not constitute manufacturing activity. It is only on June 24, 2010, the Board has issued a circular to the effect that the process of pickling does not amount to manufacture. Therefore, during the relevant period, that is, during the period from March 2, 2005 to December 31, 2005, it could not be said that the issue was settled and that the assessee paid duty on decoiled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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