CESTAT overturns denial of credit due to supplier's error, sets precedent on manufacturing definition

The Appellate Tribunal CESTAT NEW DELHI allowed the appellant's appeal against the denial of credit by the Commissioner (Appeals) due to the supplier's error in paying duty. The Tribunal determined the supplier's actions did not constitute manufacturing, but as the duty was paid and the supplier was not involved in the case, the recipient's assessment could not be revisited. Relying on precedent, the Tribunal overturned the initial decision and granted the appeal.

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The Appellate Tribunal CESTAT NEW DELHI allowed the appeal filed by the appellant against the denial of credit of Rs. 2,53,199/- by the Commissioner (Appeals) due to the supplier of input wrongly paying duty. The Tribunal found that the activity of the supplier did not amount to manufacture, but since the supplier had paid duty and was not part of the proceedings, the assessment could not be reopened at the recipient end. Citing precedent, the Tribunal set aside the impugned order and allowed the appeal.

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