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TMI Blog2024 (12) TMI 1453X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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.' Conclusion - The assessee is entitled to Cenvat Credit in view of the fact that the Revenue has accepted the excise duty paid by the assessee on the clearance of final products, irrespective of the fact, whether it amounts to manufacture or not. The issues decided in favour of the assessee and against the Revenue - appeal dismissed. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE D.N.RAY Appearance: For the Appellant(s) No. 1: Mr. PY Divyeshvar (2482). For the Opponent(s) No. 1: Mr Paresh M Dave (260). ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned advocate Mr. P.Y. Divyeshvar for the appellant and learned advocate Mr. Paresh M. Dave for the respondent. 2. This appeal is filed under section 35G of the Central Excise Act, 1944 (For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of coil which does not amount to manufacture. Reliance was placed on Rule 2 (k) of the Rules where term input has been defined as well as Rule 3 of the Rules where the eligibility to take the credit of the duty paid on any input or capital goods received in the factory of manufacturer of final product or premises of the provider of output service is provided. As per Rule 2 (h) of the Rules, final product is defined as excisable goods manufactured or produced from input, or using input service. Accordingly, the petitioner was called upon to show cause as to why wrongly availed and utilised Cenvat Credit amounting to Rs. 4,84,27,234/- should not be recovered under Rule 14 of the Rules read with section 11AB of the Act along with penalty and interest. 8. The adjudicating authority passed the order-in-original dated 27.03.2012 holding that the process undertaken by the assessee on CRGO coils of width of more than 600mm to obtain desired size of width less than 600mm by mere cutting/slitting does not amount to manufacture and the assessee was not required to pay duty on such goods. However, as the assessee continued to pay duty on clearance of the resultant product, the duty paid for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se duty as it emerged from the process not amounting to manufacture as defined under Section 2 (f) of the Central Excise Act. Learned Counsel for the respondent department has tried to justify the impugned order disallowing the Cenvat credit availed by the appellant on the inputs on the plea that the final product has not emerged from the process which could be termed as manufactured. Such an argument, in our view cannot be sustained as it is against the tenets of equity and justice. The department having accepted the excise duty on the final product cannot be permitted to deny Cenvat credit on the inputs used for the manufacture of the final product on such a technical plea. If such an argument is allowed to sustain it would negate the entire object of the Cenvat credit scheme which has been put in place with a view to protect the assessee from double taxation. Thus, on this count also, the impugned orders are not sustainable. 10. Learned advocate Mr. P.Y. Divyeshvar for the appellant Revenue referring to the order-in-original as well as decisions relied upon by the adjudicating authority submitted that by merely cutting/slitting of 600mm of CRGO coils cannot be construed as amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in case of Commissioner v. Creative Enterprise reported in 2009 (235) ELT 785 (Guj) 17. Considering the rival submissions made by both the sides and on perusal of the impugned order-in-original as well as order passed by the Tribunal, it appears that the process undertaken by the assessee was cutting/slitting of imported CRGO coils of width more than 600mm to the width of less than 600mm. It also emerges from the record that the petitioner has paid more excise duty while clearing the final products under Chapter Heading No. 7226 1100 than the amount of Cenvat Credit availed on the duty paid on import of CRGO coils under Chapter Heading N. 7225 1100. 18. This Court in case of Creative Enterprise (supra) has held as under: 2. Heard Mr. H.C. Buch, learned Additional Standing Counsel for the appellant revenue. The learned counsel has read extensively from the show cause notice and the order made by the adjudicating authority to contend that the respondent was not a manufacturer but was merely an agent of Dr. Beck Company (I) Limited. It was submitted that in the circumstances, in absence of any independent manufacture by the respondent, there was no question of the respondent bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the process involved is of repacking, but repacking with conscious and specific end use in view. In other words, repacking makes the products marketable. In the cases of J .K. Synthetics Ltd. Vs. Collector 1998 (967) ELT 310(T) and Ponds India Ltd. Vs. Collector 1993 (63) ELT 3 (Mad.), it is held that Manufacturing process continues till the article is put in suitable packaging to smaller packages. I find that the appellant had availed modvat credit of Rs.1,70,53,294.00 on the goods received in bulk packs whereas the appellant paid excise duty amounting to Rs. 1,95,03,939.00 on the final product i.e. the repacked goods in small packs. Accordingly, the process has to be treated as amounting to manufacture. 5. With regard to modvat credit on duty paid inputs, I find that the appellant has received duty paid raw materials, the said raw material has been received in the factory and were utilized in the manufacture of final products. In view of this and considering the position as indicated above, I set aside the impugned order and allow the modvat credit of Rs.1,70,53,294.00. I also set aside the penalty of Rs.5,00,000/ and demand of interest under Section 11 AB of the Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity of decoiling the HR/CR sheets did not constitute manufacture and, therefore, the assessee could not have taken credit of duty paid on HR/CR coils. It is further argued that if the process of decoiling the HR/CR coils did not constitute manufacture, then, obviously no duty was payable on clearance of the decoiled HR/CR coils and consequently the assessee could not have taken credit of duty paid on HR/CR coils. Merely because the assessee had paid duty though not payable, it cannot be said that the credit of input duty has been correctly taken. It is contended that the assessee had applied to the Board seeking regularisation of the credit which was wrongly taken, but the Board has rejected the request made by the assessee. In these circumstances, it is submitted that the CESTAT ought not to have interfered with the order passed by the authorities below. 8. We see no merit in the above contentions. As rightly contended by the representative of the assessee appearing in person, till March 1, 2005 the Revenue has accepted that the activity carried on by the assessee constituted manufacturing activity in view of Board circular dated September 7, 2001 and accordingly held that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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