Cenvat credit on bright bars cannot be denied merely because the supplier's process was disputed as non-manufacture.

Cenvat credit on bright bars could not be denied merely because the supplier's conversion of round bars into bright bars was said not to amount to manufacture. The Tribunal treated the supplier-side excisability dispute as irrelevant where duty had in fact been paid, the goods were received under valid documents, and they were used in or in relation to manufacture of the final products. Conflicting departmental views on the excisability of bright bars further supported the view that credit remained available. The denial of credit was therefore set aside and the assessee's entitlement was upheld.

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Issues: Whether Cenvat credit could be denied on bright bars received as inputs on the ground that the supplier's process of converting round bars into bright bars did not amount to manufacture and, therefore, the goods were not excisable at the supplier's end.

Analysis: The duty payment on the bright bars was not in dispute, and the goods were admittedly received under valid documents and used in the manufacture of the appellant's final products. The denial was based only on the premise that, at the supplier's end, the bright bars were not excisable because the process of manufacture was said to be absent. The Tribunal treated that premise as irrelevant for credit eligibility once duty had in fact been paid on the inputs and the inputs were used in or in relation to manufacture. It also noted the prevailing departmental confusion and conflicting trade notices on the excisability of bright bars, which reinforced that credit could not be denied merely because the supplier's process was disputed.

Conclusion: The Cenvat credit on bright bars was held to be admissible, and the denial of credit was set aside in favour of the assessee.

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