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of <h1>Tribunal allows Cenvat credit on inputs used in manufacturing final products, clarifying duty payment requirements</h1> <h3>M/s. RUCHI SOYA INDUSTRIES LTD. Versus COMMISSIONER OF GST & CE, CHENNAI OUTER</h3> M/s. RUCHI SOYA INDUSTRIES LTD. Versus COMMISSIONER OF GST & CE, CHENNAI OUTER - TMI Issues:Disallowance of Cenvat credit on high quality RBD Palm Stearin alleged to be used in the manufacture of final products.Analysis:The case involved the appellants, engaged in manufacturing various products, availing Cenvat credit on high quality RBD Palm Stearin. The department contended that the process did not amount to manufacture, leading to the disallowance of credit. Show-cause notices were issued for specific periods, and penalties were imposed after the original authority confirmed the demand. The Commissioner (Appeals) upheld the decision.During the appeal, the appellant's counsel argued that the high-density RBD Palm Stearin was used to manufacture a final product of low density, which was cleared after paying excise duty. The appellant had paid duty on inputs and final products, citing a relevant case to support their argument.The Authorized Representative for the Revenue supported the findings of the impugned order, leading to a hearing where both sides presented their arguments. The crucial issue revolved around whether disallowing credit on inputs used in manufacturing final products was justified. The appellant had paid excise duty on the final products, and the department's contention that the process did not amount to manufacture was challenged.The tribunal, referencing a prior decision, concluded that if excise duty was paid on the final product, disallowing credit on inputs post-payment was unjustified. It was noted that the department should have informed the appellant before duty payment if the process was deemed non-manufacture. Given the circumstances and the precedent, the tribunal set aside the impugned order, allowing the appeal with any consequential reliefs.The judgment highlighted the importance of clarity regarding the manufacturing process and excise duty implications, emphasizing that disallowing credit after duty payment was unwarranted. The decision provided a legal precedent for similar cases involving credit disallowance on inputs used in manufacturing final products.
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