Tribunal grants appellant Cenvat credit on inputs from specific supplier, emphasizing duty payment over manufacturing process.

The Tribunal allowed the appellant's appeal, determining their entitlement to claim Cenvat credit on inputs purchased from a specific supplier. Despite challenges regarding the supplier's manufacturing processes and duty payment, the Tribunal concluded that the appellant met the necessary conditions for claiming the credit. Emphasizing the significance of duty payment on the input rather than the specific manufacturing process, the Tribunal set aside the initial order, granting relief to the appellant based on the law.

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Issues:
1. Entitlement to Cenvat credit on inputs purchased from a specific company.
2. Classification of the processes carried out by the supplier as manufacturing under Section 2(f) of the Central Excise Act, 1944.
3. Validity of duty payment and invoices for the inputs received.

Analysis:
1. The central issue in this appeal was whether the appellant could claim Cenvat credit of Rs. 1,81,363/- on inputs procured from M/s. Himadri Chemicals & Industries Limited (HCIL) during a specified period. The Department contended that HCIL did not meet the definition of a manufacturer as per Section 2(f) of the Central Excise Act, 1944. An investigation by the Anti-Evasion Unit led to a show cause notice against HCIL for recovery of Cenvat credit on inputs, alleging that HCIL's processes of blending Heavy Creosote Oil with Furnace Oil did not constitute manufacturing. The payment made by HCIL was also questioned as not being Central Excise duty but a mere deposit to the Government Account.

2. After hearing both parties and examining the records, the Tribunal found that the appellant had fulfilled the necessary conditions for claiming Cenvat credit. It was noted that the supplier of the input had paid duty on the input and issued valid invoices to the appellant. The input received by the appellant was used in the manufacturing process of their final product, and its duty-paid status was confirmed by the invoices. The Tribunal emphasized that the key factor for claiming Cenvat credit was the duty payment on the input, rather than the specific manufacturing process that generated the input. Therefore, the appellant was deemed eligible to avail Cenvat credit on the duty-paid input.

3. Consequently, the Tribunal set aside the impugned order and allowed the appeal filed by the appellant, granting consequential relief as per the law. The judgment highlighted the importance of the duty payment and valid invoices in establishing the entitlement to Cenvat credit, irrespective of the nature of the manufacturing process that produced the input. The decision was pronounced in open court on 13-4-2022 by the Member (J) of the Appellate Tribunal CESTAT Kolkata.

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