Appellant entitled to CENVAT Credit for assembling packing kits

The Tribunal allowed the appeal, holding that the appellant was entitled to CENVAT Credit on duty paid inputs used in assembling packing kits. Despite the Revenue's argument that assembling inputs does not amount to manufacture, the Tribunal noted that appropriate duty was paid on the final products, indicating acceptance of the manufacturing process. Citing a precedent from the Hon'ble Bombay High Court, the Tribunal ruled that once duty on final products is accepted, CENVAT Credit need not be reversed even if the activity does not strictly qualify as manufacture. The impugned order was found without merit, and the appeal was granted with consequential relief.

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Issues:
- Entitlement to CENVAT Credit on duty paid inputs used in the assembly of packing kits
- Determination of whether assembly of various inputs into packing kits amounts to manufacture

Analysis:
The appeal was filed against an Order-in-Original passed by the Commissioner of Central Excise, Mumbai-V, regarding the denial of CENVAT Credit on duty paid inputs used in manufacturing packing kits. The appellant utilized inputs such as Corrugated Cartons, M.S. Angles, Rubber Sheets, etc., on which appropriate duty was paid. The Revenue contended that the assembly of these inputs into packing kits does not constitute manufacture, leading to a demand notice for recovery of CENVAT Credit. The appellant argued that the duty paid inputs were used in manufacturing the kits, and the appropriate duty was discharged on the final products. The appellant relied on a decision of the Hon'ble Bombay High Court in a similar case to support their contention.

Upon considering the submissions, the Tribunal focused on determining whether the appellant was entitled to CENVAT Credit on the duty paid inputs used in the assembly of packing kits. The Revenue's argument was based on the premise that assembling inputs into kits does not amount to manufacture. However, it was noted that the Revenue had collected appropriate duty on the final products, indicating acceptance of the manufacturing process. The Tribunal referenced the decision of the Hon'ble Bombay High Court in a similar case, where it was held that once duty on final products is accepted by the department, CENVAT Credit need not be reversed even if the activity does not strictly qualify as manufacture. Relying on this precedent, the Tribunal found the impugned order to be without merit and allowed the appeal, providing consequential relief as per law.

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