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TMI Blog2024 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued on 08.08.2007 for recovery of the said credit along with interest and penalty. On adjudication, the same was confirmed with interest and penalty. Aggrieved by the same, they filed appeal before the Tribunal and vide Final Order dated 07.05.2009, the matter was remanded to the original authority to decide the case afresh. Consequently, the same was adjudicated and the learned Commissioner in the impugned order confirmed the demand with interest and penalty. Hence, the present appeal. 3.1. At the outset, the learned Senior advocate for the appellant has submitted that they have two units, i.e. No.B-59 situated at 2nd Cross, 1st stage, Peenya Industrial Estate, Bangalore and the second one bearing No.B-165, situated in 3rd Cross, 1st Stage, Peenya Industrial Estate, Bangalore. They have been issued with a show-cause notice for recovery of cenvat credit amounting to Rs.72,97,860/- availed on inputs at B 59 for manufacture of hand primers and fuel filters but since these were not used in the manufacture of finished goods in the factory but cleared to other unit B-165 under Delivery Challans/ issue slips, where it is used for manufacture of hand primers and fuel filters, later cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents along with their Written Submissions dated 03.06.2024. Also, he has enclosed the monthly statement for each month for the period December 2004 to July 2005 indicating monthly production/ consumption as prescribed which show that there was consumption of inputs received at Unit B-165 and used in the production of finished goods from the inputs received from B-59. Therefore, denial of cenvat credit alleging that the inputs have not been used in the production of finished goods is unsustainable. He has submitted that only because they did not obtain permission to clear the finished goods from B-165 manufactured on job work basis, the credit availed on inputs cannot be denied. 3.3. With regard to denial of cenvat credit of Rs.18,24,710/- on inputs which were subjected to processes of drilling, burr removal, grinding, blackening etc. on the ground that the said activities do not amount to manufacture, the learned advocate has submitted that this issue has been decided by the Tribunal with reference to the unit at B-165 vide Final Order No.21148/2023 dated 20.10.2023. Therefore, the demand on this account is unsustainable; hence, to be set aside. 3.4. With regard to the demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said materials were actually used by the other unit. Further, on perusal of the total consumption and also clearances, it is seen that there are excess consumption on some materials and also there are no clearance details of some finished goods. These discrepancies have not been explained. Further, he has submitted that the allegation against the appellant is not with regard to duty payment at the other unit at B-165 but admissibility of cenvat credit availed on the inputs which have not been used in relation to manufacture of the final goods at B-59. It is submitted that they have admitted that cenvat credit on inputs has been availed and cleared to their other unit B-165 without payment of duty /reversal of credit and Annexure-II challan for jobwork which have not been declared to the Department. Also, it is claimed that they have cleared inputs on payment of duty from the unit B-165 but no permission was availed for clearance from the job worker's premises. Further, he has submitted that benefit of Notification No.214/86-CE is a conditional notification and cannot be available to the appellant in the present case as no procedure has been followed nor any declaration has been s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant is justified. 5. Heard both sides and perused the records. 6. The issues for consideration in the present appeal are whether cenvat credit of : (i) Rs.72,97,860/- availed on inputs at B-59 transferred to Unit B-165 is admissible; (ii) Rs.18,24,719/- availed on inputs used in the final product not amounting to manufacture; (iii) Rs.5,60,978/- is admissible which was denied on various grounds. 7. Arguing in support of the admissibility of the credit availed on inputs received in their factory and later transferred to their other Unit B-165 having separate Central Excise registration, amounting to Rs.72,97,860/-, it is submitted that the inputs received in their factory at B-59 were transferred against proper delivery notes/ challans after recording their receipt in their input stock register to their unit at B-165 for further processing and cleared finished goods for export and/or on payment of duty thereafter from the said unit. To establish the claim of transfer of inputs from Unit B-59 to Unit B-165 through challans and receipt of inputs at Unit B-165 and further processing, the appellant had enclosed relevant Dispatch / delivery notes along with Annexure-II C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir Unit at B-59. 8. The cenvat credit of Rs.18,24,719/- availed on inputs that were used in the manufacture of finished goods was denied on the ground that the process of conversion of inputs into final products does not amount to 'manufacturer'. This issue has been considered by this Tribunal in their own case and it has been observed that the process viz. drilling, burr removal, grinding, blackening etc. as per the specification of customers undertaken by the appellant result into the emergence of a new product having distinct identity, use and hence amount to manufacture, vide Final Order No.21148/2023 dated 20.10.2023. Thus, the credit on this count is also admissible. 9. On the issue of admissibility of cenvat credit of demand of Rs.5,60,978/- on rejected goods, it has been submitted that certain goods were rejected by M/s. Reva Electric Co. Pvt. Ltd. and consigned to their Unit at B-59 against invoice No.475 dated 28.03.2005, erroneously the seal of Unit at B-165 was affixed on the returned invoice but the credit was availed at Unit B-59 and goods were reprocessed and cleared to Reva Electric Co. Pvt. Ltd. under Invoice No.11001 dated 04.04.2005 and No.11018 dated 15.04.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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