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M/s. Packotech Industries Versus CCE, Rohtak

2016 (1) TMI 879 - CESTAT NEW DELHI

Utilized ineligible credit for the payment of final product - whether or not the process undertaken by the appellant amounts to manufacture for central excise purpose - Held that:- The original authority has erred in not analyzing all the relevant facts involved in the present case. As such, we find that the assessee has followed the cenvat credit scheme as applicable to them in the manufacture of their final products. The demand is not sustainable on this ground.

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ed:- 23-10-2015 - SMT. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) AND SHRI B. RAVICHANDRAN, MEMBER (TECHNICAL) For the Petitioner : Shri Ashwini Sharma, Advocate For the Respondent : Shri R.K. Mishra, DR ORDER Per B. RAVICHANDRAN: The appellant is engaged in the manufacture of flexible laminated film and flexible metalized film. They were availing cenvat credit on the raw materials mainly polyester film and used the credit for payment of duty on the final products. After certain verification, the Rev .....

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der Rule 15 of Cenvat Credit Rules and also further penalty under Rule 26(2) and 27 of Central Excise Rules, 2002. Aggrieved by this order, the appellant is before us. 2. Ld. Counsel, Shri Ashwani Sharma summarized the appellants plea as below:- (a) The process undertaken by the appellant amounts to manufacture. They procure duty paid polyester film which is subjected to the process of printing with the help of printing cylinders. Thereafter, printed polyester film is first laminated with the m .....

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reme Court s decision in the case of Metlex (I) Pvt. Ltd. - 2004 (165) ELT 129 (SC) is not applicable to the facts of their case. In the Metlex (I) Pvt. Ltd. (supra), the process involved is lamination/metallization of the film, whereas the appellant is undertaking a number of steps in making the final product and lamination is only one such step. Further, in the Metlex (I) Pvt. Ltd. (supra), the assessee contended that the process undertaken by them does not amount to manufacture and the Hon bl .....

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cision in the case of Metlex (I) Pvt. Ltd. - 2008 (232) ELT 479 (Tribunal-Delhi) and Markwell Paper Plast Pvt. Ltd. Vs. CCE, Noida - 2010 (262) ELT 579 (Tribunal-Delhi). (c) Ld. Counsel further submitted that even if it is assumed that the process undertaken by them does not amount to manufacture it is a fact that they have paid duty on the final products which is much higher than the credit taken on inputs. The credit taken on inputs have been used towards such payment. In such situation, there .....

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) Anutone Acoustics Ltd. Vs. CCE, Thane-I[2013(298) ELT 246 (Tribunal-Mumbai) (5) Foam Techniques Mfg. (I)Pvt. Ltd. CCE, Thane-I[2015 (317) ELT 266 (Tribunal-Mumbai)] (6) RAS Polytex Pvt. Ltd. Vs. CCE & ST, Bhopal [2013 (290) ELT 244 (Tribunal-Delhi). (7) Asian Colour Coated Ispat Ltd. Vs. CCE, Delhi-II[2015(317) ELT 538 (Tribunal-Delhi). 3. Ld. Authorised Representative , Shri R.K. Mishra reiterated the findings of the Original Authority and stated that the decisions of the Tribunal in Anut .....

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for decision is whether or not the process undertaken by the appellant amounts to manufacture for central excise purpose and if not, the utilized ineligible credit for the payment of final product can be subjected to recovery again. The Original Authority relied on the decision of the Hon ble Supreme Court in Metelex (I) Pvt. Ltd. (supra), more specifically, para-15 of the said order, to hold that the process undertaken by the appellant does not amount to manufacture. He also held that Chapter N .....

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film and again lamination with poly film produced in the factory. The appellant have explained in detail the trade usage of their final product along with the technical specifications like OTR (Oxygen Transmission Rate) and MVTR(Moisture Vapour Transmission Rate) and the specific usage of final product for which, admittedly, input poly film cannot be used. It is clear that the final product cleared by the appellant are having distinct commercial name and utility, which cannot be fulfilled by th .....

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