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2018 (7) TMI 1931 - AT - Central ExciseCENVAT Credit - Process amounting to manufacture or not - Whether Cenvat credit availed by NIPL on the inputs sent to TGS, which were used in the manufacture of final products, was available to NIPL? - HELD THAT:- In the instant case there is no dispute that structural fabrication was carried out on the goods supplied by TGS at the site of NIPL - Such structural fabrication, as held in the case of Mahindra & Mahindra Vs. CCE [2005 (11) TMI 103 - CESTAT, NEW DELHI] by the Larger Bench of this Tribunal amounts to “manufacture” within the meaning of Section 2(f) and Section 3 of the Central Excise Act. It is not in dispute that the kiln and cooler in question are capital goods, used in the manufacture of final product, namely, sponge iron. The raw material on which NIPL has availed Cenvat credit are inputs, used in the manufacture of the capital goods - Even otherwise, as per Rule 2(k) of the CCR, inputs include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. Therefore, NIPL was eligible to avail the disputed Cenvat credit. Liability of payment of duty on TGS on the manufacture of the said capital goods - Job-work - HELD THAT:- It is an admitted fact that NIPL, being the principal manufacturer in the instant case, had undertaken to discharge the duty liability harnessed on TGS by way of a declaration made before the jurisdictional Central Excise officer as per Notification No. 214/86-CE - Since, there is no allegation or finding to the effect that the principal manufacturer in the instant case had not complied with any condition of the said notification, the benefit of the Notification was available to them. Therefore, TGS was not liable to discharge duty on the goods manufactured by them - Since, the liability of payment of duty on NIPL is not the subject matter of the Show Cause Notice in the instant case, we refrain from making any observation to that extent. Penalty - HELD THAT:- Since the demands against NIPL and TGS are liable to be dropped, the penalty imposed on Shri R.K. Agrawal cannot sustain. Appeal dismissed - decided against Revenue.
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