Export rebate and Cenvat credit cannot be denied merely because the department disputes manufacture where duty-paid goods are actually exported.

Cenvat credit and rebate could not be denied on stainless steel wire rods exported after pickling and annealing merely because the department disputed whether the activity amounted to manufacture. The Tribunal held that duty-paid goods exported under the prescribed rebate procedure remain eligible for export benefits when the exports are actual and properly covered by the scheme. It followed earlier decisions on identical facts and rejected the contrary view that treating the process as non-manufacture automatically defeats credit or rebate. The assessee was therefore entitled to the claimed benefits.

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Issues: Whether the denial of Cenvat credit and rebate on stainless steel wire rods exported after pickling and annealing was justified on the ground that the activity did not amount to manufacture.

Analysis: The goods were procured on payment of duty, subjected to pickling and annealing, and exported under rebate. The Tribunal held that the impugned demand could not be sustained merely because the department treated the activity as not amounting to manufacture. It relied on settled law that a manufacturer is not deprived of export benefits otherwise available to an exporter, and that export of duty-paid goods does not justify denial of credit or rebate when the goods are actually exported under the prescribed procedure. The earlier decisions on identical facts were followed, and the contrary view of the adjudicating authority was found inconsistent with the law.

Conclusion: The denial of Cenvat credit and rebate was unsustainable, and the assessee was entitled to the benefit claimed.

Ratio Decidendi: Where duty-paid goods are exported under rebate, the exporter cannot be denied Cenvat credit or rebate merely because the department disputes manufacture, if the exports are actual and covered by the export procedure.

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