Cenvat credit of duty paid on inputs - whether available when process not amounting to manufacture?

PJ/Case Laws/2012-13/1002

Case: COMMISSIONER OF C. EX., VADODARA-I V/s HYLITE CABLES

Citation: 2007 (212) E.L.T. 284 (Tri.- Ahmd.)

Issue:- Duty paid on inputs by supplier is available as Cenvat credit to buyer of such product even if process does not amount to manufacture.

Brief Facts: - The Adjudicating Authority had denied the Cenvat credit on duty paid inputs on the ground that the drawing of wire from wire rods does not amount to manufacture and duty so paid does not represent duty and in such case same is also not available as credit to buyer of such product.

In appeal, the Commissioner (Appeal) relied upon the case laws in respect of M/s. Kerala State Electric Corpn. v. CCE, Kochi [1996 (84) E.L.T. 144 (Trib.)] and M/s. Trinetra Texturisers (P) Ltd. v. CCE, Surat [2004 (166) E.L.T. 384 (Tri. - Mumbai)], wherein Hon’ble Tribunal has held that the inputs non-re-assessable to duty - Modvat credit to be allowed as per the amount of duty indicated in duty paying documents - Excise authorities have no jurisdiction to re-assess the duty on inputs. Moreover, there is no dispute regarding payment of duty made by the supplier. There is nothing on record to suggest that the supplier of the goods have taken refund of the duty. Therefore, duty paid character of the goods is undisputable. It was held that it is pertinent to note that Cenvat scheme is self contained code and it does not confer any power on the authority having jurisdiction over a manufacturing unit to reassess duty on inputs received for the purpose of Cenvat credit.

The Appellant-Revenue being aggrieved by the order passed by the Commissioner (Appeals) has preferred the present appeal.

Appellant’s Contention: - Revenue asserted that the amount indicated in the invoices and paid by the manufacturer does not represent Central Excise duty, inasmuch as copper wire drawn from wire rods does not amount manufacture attracting levy of duty. As such they have contended that availment of Modvat credit by the present respondent was not in accordance with law.

Reasoning of Judgment: -The Tribunal held that the Revenue is not disputing the fact that duty stand paid by the supplier. The same has not been refunded to him. The respondents have taken credit of the duty paid by the supplier. As such there is no revenue loss and the entire situation is revenue neutral. It is further noticed that the Revenue is not agitating the fact of payment of duty by the supplier at their end. As such view taken by the Commissioner (Appeals) cannot be held to be not in accordance with law.

Decision: - Appeal rejected.

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PJ/Case Laws/2012-13/1002

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