CENVAT credit on duty paid aluminium foils remained available after cutting and slitting where the notification conditions were met

Notification No. 24/2012-C.E. (N.T.) provided that where excise duty was paid on cutting, slitting and printing of aluminium foils, CENVAT credit on inputs, capital goods and input services used for the final product was not required to be reversed, subject to the stated conditions. The notification reflected the position that recipients of such duty paid goods should not lose credit merely because the underlying process was treated as not amounting to manufacture. On that basis, the respondent was entitled to retain the credit and the Revenue's demand for reversal was unsustainable.

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Issues: Whether the respondent was entitled to retain Cenvat credit on duty paid aluminium foils subjected to cutting and slitting, and whether the Revenue's demand for reversal of such credit was sustainable.

Analysis: The Tribunal noted that Notification No. 24/2012-C.E. (N.T.) issued under section 58 of the Central Excise Act, 1944 specifically provided that where excise duty had been paid on the process of cutting, slitting and printing of aluminium foils, the CENVAT credit taken or utilised on inputs, capital goods and input services used in making the final product would not be required to be reversed, subject to the stated conditions. The notification reflected the Central Government's position that recipients of such duty paid goods should not be denied credit merely because the underlying process had been treated as not amounting to manufacture.

Conclusion: The respondent was entitled to Cenvat credit and no reversal was required; the Revenue's appeal failed.

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