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TMI Blog2023 (11) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... olled (HR) coils/sheets' along with other inputs to be supplied to 'job-workers' for production and return of 'mild steel (MS) pipes' to them and had been availing credit thereof to be utilized for clearing the finished goods from their premises. In addition, they had also procured ''mild steel (MS) pipes' manufactured by some of these 'job-workers' on their own account and by others that were subjected to processes like 'end-cutting' and 'varnishing' which, according to central excise authorities, did not amount to manufacture despite which they had not only been clearing these as though excisable but also availed credit of duty paid on such purchases. Demand of Rs. 39,73,256 for the disputed period was confirmed on the ground that the procured 'mild steel (MS) pipes' were not inputs as defined in rule 2(k) of CENVAT Credit Rules, 2004 and, hence, ineligible in terms of rule 3 of CENVAT Credit Rules, 2004. The second element of the demand, of Rs. 14,55,597 towards credit availed of duty paid on procurement of 'angles', 'beams' and 'channels', was confirmed on the ground that these were neither 'inputs', as defined in rule 2(k) of CENVAT Credit Rules, 2004, used in manufacture of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decisions of the Tribunal in Mangalam Cement Ltd V Commissioner of Central Excise, Jaipur-I [2018 (360) ELT 737 (Tri-LB], of the Hon'ble High Court of Chhattisgarh in Commissioner of Customs, Central Excise & Service Tax, Bilaspur v. Singhal Enterprises Pvt Ltd [2018 (359) ELT 313 (Chhattisgarh)] and of the Tribunal in Commissioner of Customs & Central Excise, Visakhapatnam-II v. APP Mills Ltd [2013 (291) ELT 585 (Tri-Bang)], it was contended that 'structural support' for any 'capital goods' are eligible for availment of credit in terms of rule 2(a)(A)(i) of CENVAT Credit Rules, 2004. 5. According to Learned Authorised Representative, the procurement of 'mild steel (MS) pipe' was undertaken without the knowledge of the jurisdictional authorities and discharge of duty thereafter is not tantamount to consent of authorities for acceptance of the claim of the appellant that denial of credit is, thereby, precluded. He submitted that even if that were so, 'one-to-one correlation' of availment and utilization as well as of such credit being less than duty paid on clearance would need to be ascertained. Reliance was placed by him on the decision of the Tribunal in Commissioner of Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss involving huge investment in plant and machinery. Since these additional activities were not considered by the Board in its Circular dated 7th September, 2001, the withdrawal of the said Circular cannot be a ground to hold that the activity carried on by the assessee did not constitute manufacturing activity. It is only on 24th June, 2010, the Board has issued a Circular to the effect that the process of pickling does not amount to manufacture. Therefore, during the relevant period, that is, during the period from 2nd March, 2005 to 31st December, 2005, it could not be said that the issue was settled and that the assessee paid duty on decoiled HR/CR coils knowing fully well that the same were not manufactured goods. If duty on decoiled HR/CR coils was paid bona fide, then availing credit of duty paid on HR/CR coils cannot be faulted. 10. Apart from the above, in the present case, the assessment on decoiled HR/CR coils cleared from the factory of the assessee on payment of duty has neither been reversed nor it is held that the assessee is entitled to refund of duty paid at the time of clearing the decoiled HR/CR coils. In these circumstances, the CESTAT following its decision i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise Rules, 2002 which is reproduced below : Rule 16. Credit of duty on goods brought to the factory. - (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take Cenvat credit of the duty paid as if such goods are received as inputs under the 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 4A of the Act, as the case may be. Explanation. - The amount paid under this sub-rule shall be allowed as Cenvat credit as if it was a duty paid by the manufacturer who removes the goods. (3) If there is any difficulty in followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being, thus, at variance with the cited decisions and, the 'capital goods', not having been installed the claim of eligibility of goods used for installing 'structural support' is not tenable. The benefit available to such goods, in terms of rule 2(k) of CENVAT Credit Rules, 2004 when used for 'on-site' manufacture of 'capital goods' is extendable only when the site happens to the alternative location for manufacture of the said 'capital goods'; it is not clearly intended for facilitation of deployment of 'capital goods' on site after clearance from factory. In the light of these facts and circumstances, the disallowance of credit of Rs. 14,55,597 is in accordance with the scheme of CENVAT. 9. CENVAT Credit Rules, 2004 offers the framework and the mechanics for neutralization of duty discharged at preceding stage of 'value addition chain'; it is, therefore, procedural enunciation in which 'availment', as is 'reversal', is in the hands of 'assessee' while 'restoration', as is recovery, of credit is left to the jurisdictional authorities. While rule 14 of CENVAT Credit Rules, 2004 enables recourse to section 11A of Central Excise Act, 1944 as does rule 15 of CENVAT Credit Rules, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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