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2015 (12) TMI 254 - CESTAT MUMBAI

2015 (12) TMI 254 - CESTAT MUMBAI - 2016 (336) E.L.T. 81 (Tri. - Mumbai) - CENVAT Credit - Captive consumption - whether the assessee have availed CENVAT credit correctly or otherwise when the activity undertaken by them on the inputs according to revenue does not amount to manufacture - Held that:- During the period post 24.06.2010, assessee had cleared the products as manufactured products on payment of appropriate duty, which was more than the CENVAT credit availed by them on the inputs which .....

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nt of CENVAT credit on the inputs. The Tribunal after considering the issue and the case law, relied upon the judgement of the Hon’ble High Court of Bombay in the case of Ajinkya Enterprises (supra) stated that the issue is no more res integra. - Impugned order is set aside - Decided in favour of assessee. - E/1708/12, E/85634/13, E/1932/12, E/1933/12, E/89124/13, E/89124/13 - Final Order Nos. A/3760-3765/2015-WZB/EB - Dated:- 2-12-2015 - Mr. M.V. Ravindran, Member (Judicial) And Mr. C.J. Mathew .....

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s, and H.R.Pickled and Oiled Coils falling under Chapter No.72 of Central Excise Tariff Act, 1985 (CETA). The assessee cleared the final products H.R. Oiled Coils and Pickled Coils (final products). The final products herein referred above are manufactured for home consumption, for export and cleared on payment of duty. It was noticed by the lower authorities that the activity undertaken by the assessee by classifying the product under Tariff Item No. 72083940 and discharge duty is incorrect in .....

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ss of oiling and pickling as preparatory steps do not amount to manufacture. The said show-cause notices directed the assessee to show cause as to why CENVAT credit should not be denied to them and be demanded from them with interest and also for imposition of penalties. The assessee contested the show-cause notices on merits and also on limitation. The adjudicating authority after following the due process of law, did not agree with the contentions raised by the assessee and confirmed the deman .....

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CENVAT credit which has been denied to the assessee is less than the amount of duty paid by them for the period in question. In support of such claim he submits the details in respect of four show-cause notices and brings to our notice that the duty liability discharged is more than the CENVAT credit sought to be denied. He would also take us through the manufacturing process and submit that the oiling and pickling of H.R. coils is a manufacturing process for de-scaling of oxide films by a combi .....

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her submission that in terms of Section 2(f) of the Central Excise Act, 1944, the process carried by them amounted to manufacture and hence they were discharging appropriate Central Excise duty on the product. He would also refer to the publication Practical Metallurgy and Materials of Industry , 2nd Edition by John E. Neely, to submit that the process of pickling is expansive and requires a lot of labour and changes the nature of article which falls under the definition of manufacture as envisa .....

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ed by a speaking order as reported in 2013 (294) ELT 203 (Bom.). He would also submit that the judgement of the Hon ble High Court has been accepted by the Revenue as is recorded in one of the order-in-original wherein the Pune III Commissionerate vide their letter No. P-III/LC-26/Rev.Status/2012 dated 10.08.2012 has accepted the judgement of the Hon ble High Court of Bombay and no appeal has been filed. He also relied upon the judgement of this Tribunal in the case of Foam Techniques Mfg. (I) P .....

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Section 11(D) of the Central Excise Act, 1944. For this proposition he relies upon the judgement of the Hon ble High Court in the case of Bajaj Auto Ltd. - 2003 (151) ELT 23 (Bom.). It is his further submission that the assessee herein was clearing the products as manufactured item from 1992 onwards and there was no objection from the department on the discharge of duty liability as manufactured product. It is his further submission that the CBEC s instruction vide Circular dated 24.06.2010 whi .....

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prises (supra) has held in favour of the appellant therein. 4. Learned D.R. on the other hand, would draw our attention to the facts of the case. It is his submission that the process of oiling and pickling is not an incidental and ancillary process as defined under Section 2(f) of the Central Excise Act, 1944. It is his further submission that there is no activity of manufacturing that take place on the products. It is in the laymans language nothing but cleaning of the inputs received by the .....

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he Apex Court has laid down the law that cutting and slitting would not amount to manufacture, it is incumbent upon the assessee not to avail CENVAT credit as the CENVAT credit on inputs can be availed when the products are manufactured. It is his further submission that the Hon ble High Court of Bombay in the case of Mahindra and Mahindra Ltd. - 2015 (321) ELT 51 (Bom.) has held that when there is an exemption and that too unconditional, assessee cannot insist upon payment of duty on exempted g .....

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ere not excisable and assessee could not have collected any charge from the purchaser in the form of excise duty. He would also rely upon the judgement of the Hon ble High Court of Rajasthan in the case of Arihant Tiles & Marbles Pvt. Ltd. - 2012 (281) ELT 692 (Raj.) for the proposition that cutting and polishing of granite and marble slabs does not amount to manufacture and plea that it was manufactured is incorrect. He would also further submit that the Apex Court in the case of Ratan Melt .....

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considered the submissions made at length by both sides and perused the records. 6. The issue involved in this case is whether the assessee have availed CENVAT credit correctly or otherwise when the activity undertaken by them on the inputs according to revenue does not amount to manufacture. 7. The undisputed facts are the assessee herein are undertaking oiling and pickling of H.R. Coils in the factory premises from 1992 onwards and clearing the same on payment of appropriate duty. The classif .....

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tivity of pickling and oiling of H.R. Coils amounts to manufacture or otherwise. In our considered view, instead of going into the issue on this point the matter in hand can be resolved only on the point, as to whether the assessee has discharged the duty liability which is more than the CENVAT credit availed on the inputs or not. It is on record and undisputed that during the period post 24.06.2010, assessee had cleared the products as manufactured products on payment of appropriate duty, which .....

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ng 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 the composite activity of de-coiling of HR/CR coils, cutting and slitting into specific sizes and thereafter pickling and oiling amounting to manufacture or not. That was clarified only on 24-6-2010. In the case of Resistance Alloys (supra) and P.V. Sanghvi (supr .....

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X., dated 14-1-2010, the appellants approached to the Commissioner for issuance of appropriate rectification for regularization of the CENVAT credit availed as their activity does not amount to manufacture and they have paid duty on clearance of the goods more than the credit availed. The Commissioner has also considered the representation of the appellant and forwarded to the Board for issuance of the required notification. The Board has neither rejected the proposal of the Commissioner, nor is .....

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ken on clearance of such inputs under cover of Central Excise invoices. As in this case, the activity of the appellants does not amount to manufacture, therefore, these inputs are cleared as such. In that event, as per Rule 3(5) of Cenvat Credit Rules, 2004 the appellants are required to pay duty equal to the credit taken thereon and the appellants have paid duty more than the credit availed. 7.2 We also find that this Bench in the case of Foam Techniques Mfg. (I) Pvt. Ltd. (supra) (wherein one .....

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