Cenvat credit remains available when used to pay duty on final products, even if the process is not manufacture.

Cenvat credit of duty paid on inputs and capital goods cannot be denied merely because the underlying process is later treated as not amounting to manufacture, where duty on the final products has been accepted and retained by the department. The settled position applied is that credit used to discharge duty on final products remains available in such circumstances, so the dispute on manufacture does not by itself justify reversal of credit. On that basis, the appellant was entitled to succeed and denial of credit was unsustainable.

---

---

Issues: Whether Cenvat credit of duty paid on inputs and capital goods could be denied merely because the process undertaken did not amount to manufacture, when duty on the final products had been accepted and retained by the department.

Analysis: The activity of drawing wire was treated by the department as not amounting to manufacture, but the duty paid on clearance of the final products was accepted as Government dues. The settled position applied was that Cenvat credit cannot be denied where it has been utilized towards payment of duty on the final products, even if the underlying process does not amount to manufacture. The issue was therefore no longer open.

Conclusion: Cenvat credit could not be denied in these circumstances, and the appellant was entitled to succeed.

---