Cenvat credit on captively consumed inputs sustained where Revenue failed to prove the process was only galvanisation, not manufacture.

GI wires captively consumed in the manufacture of stay wire and barbed wire, both cleared on payment of duty, supported entitlement to Cenvat credit where the Revenue failed to substantiate its claim that the process was confined to mere galvanisation and not manufacture. The lower appellate authority's finding that the adjudicating authority had not proved the basis for denial remained undisturbed, and no substantial ground was shown to dislodge it. On that record, the challenge to credit failed and the order allowing the assessee's claim was sustained.

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Issues: Whether the process undertaken in relation to GI wires amounted to manufacture and whether the Revenue could deny the Cenvat credit on inputs used for the manufacture of the final products.

Analysis: The disputed quantity of GI wire was found to have been captively consumed in the manufacture of stay wire and barbed wire, which were cleared on payment of duty. The finding of the lower appellate authority was that the adjudicating authority had not substantiated the allegation that the relevant quantity of GI wire had undergone only galvanisation so as to deny the benefit. On the record, no substantial ground was shown to dislodge those findings.

Conclusion: The process was not shown to be confined to mere galvanisation in a manner justifying denial of credit, and the Revenue's challenge failed.

Final Conclusion: The Revenue's appeal was rejected and the order allowing the assessee's claim was sustained.

Ratio Decidendi: Where inputs or intermediate goods are captively consumed in the manufacture of duty-paid final products and the allegation that the relevant process is not manufacture is not substantiated, denial of credit cannot be sustained.

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