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M/s S.M. Auto Engineering Pvt. Ltd. Versus Commissioner of Central Excise, Pune-I

2016 (12) TMI 31 - CESTAT MUMBAI

Manufacture - the appellant is purchasing semi finished Auto Parts on payment of Excise duty and availing the CENVAT credit. The appellant, on such bought Auto Parts, carrying out certain processes including ancillary and incidental processes such as sizing on fixture, powder coating, inspection, fine boring, deburring, gauging, thickness measurement, dimension inspection, application of rust preventive oil, champering, tapping, welding, drilling, notching, thread cleaning depending on the type .....

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said duty paid goods. The condition is that assessee is required to pay duty on reissue of bought out goods equivalent to the CENVAT credit availed, if the process does not amount to manufacture and if the process is amount to manufacture then the duty as per Section 4 is required to be paid i.e. on the transaction value. - In the present case it is the contention of the Revenue that the appellant is not carrying out any manufacturing activity. Therefore the appellant is required to pay the .....

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e discussion, we are of the considered view that the appellant has rightly availed the CENVAT credit in respect of semi finished bought out components. - CENVAT credit allowed - appeal allowed - decided in favor of appellant-assessee. - APPEAL NO.E/3328/06-Mum - ORDER NO.A/93763/16/EB - Dated:- 8-11-2016 - SHRI RAMESH NAIR, MEMBER (JUDICIAL) And SHRI C.J. MATHEW, MEMBER (TECHNICAL) Shri Shrenik R. Gandhi, Chartered Accountant, for Appellant Shri N.N. Prabhudesai, Superintendent (A.R.), for R .....

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ing, thread cleaning depending on the type of the product, after carrying out aforesaid process they are clearing the same to the manufacturer on payment of Excise duty. The adjudicating authority denied the CENVAT credit on the semi finished product on the ground that the appellant is not carrying out any manufacturing activity, therefore they are not entitled to the CENVAT credit. Accordingly the demand of CENVAT credit amounting to ₹ 57,51,712/- and equal amount of penalty under Section .....

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ling, notching, thread cleaning depending on the type of the product, were done. After carrying out the aforesaid processes, the good became the final product therefore they correctly availed the CENVAT credit on the input and the semi finished goods and paid duty on final product. He further submits that even if the contention of the department is accepted that there is no manufacture involved, then in terms of Rule 16 of Central Excise Rules, the CENVAT credit can be availed for non-manufactur .....

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of finished component. The duty was paid on the finished component is higher than the CENVAT credit availed on bought out semi finished goods, for this reason also the demand is unsustainable. He placed reliance on the following judgment:- (i) Prasad Films Laboratories Vs. Komal Metals Private Ltd [2001 (130) ELT 491 (Tri-Chennai)] (ii) Collector of Central Excise, Chandigarh Vs. Fine Packaging Private Ltd. [1995 (77) ELT 588 (Tribunal)] (iii) Commissioner of Central Excise, Indore Vs. M.P. Tel .....

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] (viii) Gamison Polysacks P. Ltd. Vs. Commissioner of Service Tax, Vadodara- 11 [2013 (292) ELT 513 (Tri-Ahmedabad)] (ix) Commissioner of Central Excise, Bangalore -I Vs. MTR Foods Ltd [2012 (282) ELT 196 (Kar.)] (x) Collector of Central Excise Vs. Chemphar Drugs & Liniments [1989 (40) ELT 276 (S.C.)] (xi) Collector of Central Excise, Bombay Vs. Rainbow Ink & Varnish co. Pvt. Ltd. [1995 (79) ELT 426 (Tribunal)] (xii) L.M.L Limited vs. Collector of Central Excise, Kanpur [1998 (103) ELT .....

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f the appellant on bought out semi finished auto parts is amount to manufacture or otherwise, case that can be decided otherwise also on the issue. We find that as per the fact of the case the appellant are purchasing semi finished goods thereafter final goods is cleared on payment of duty. Even if the activity does not amount to manufacture the appellant is entitled for the CENVAT credit on receipt of semi finished goods on the basis of reissue of goods on payment of duty. This is permissible i .....

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e CENVAT Credit Rules, 2002 and utilise this credit according to the said rules. (2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4 .....

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