CESTAT upholds denial of Cenvat credit on duty paid inputs for wire drawn from wire rods

The Appellate Tribunal, CESTAT, Ahmedabad upheld the Commissioner (Appeals) decision denying Cenvat credit on duty paid inputs for wire drawn from wire rods. The Tribunal found that the duty paid by the supplier was undisputed and that the respondent had lawfully taken credit for the duty paid, resulting in a revenue-neutral situation. As the Revenue did not challenge the duty payment by the supplier, the Tribunal rejected the Revenue's appeal, affirming the legality of the Cenvat credit taken by the respondent.

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Issues involved: Appeal against Commissioner (Appeals) order denying Cenvat credit on duty paid inputs for wire drawn from wire rods.

Summary:
The Appellate Tribunal, CESTAT, Ahmedabad heard an appeal by the Revenue against the Commissioner (Appeals) order. The Commissioner had denied Cenvat credit on duty paid inputs, stating that drawing wire from wire rods does not amount to manufacture attracting levy of duty. The Commissioner's decision was based on the understanding that the Cenvat scheme does not allow re-assessment of duty on inputs for the purpose of credit. The Commissioner relied on case laws to support this position, emphasizing that duty paid by the supplier is undisputable. In response, the Revenue argued that the duty paid does not represent Central Excise duty as wire drawing does not trigger duty levy, thus the Modvat credit taken by the respondent was not lawful.

The Tribunal noted that the Revenue did not contest the fact that duty was paid by the supplier and not refunded, and that the respondent had rightfully taken credit for the duty paid. This resulted in a revenue-neutral situation with no loss to the government. The Tribunal observed that the Revenue did not dispute the duty payment by the supplier, indicating that the Commissioner (Appeals) decision was in accordance with the law. Consequently, the appeal by the Revenue was rejected.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, emphasizing the legality of the Cenvat credit taken by the respondent based on the duty paid by the supplier.

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