Cenvat credit on processed steel tubes and pipes was upheld where cutting and electroplating did not create a new excisable product.

Steel tubes and pipes subjected only to cutting and electroplating were treated as not resulting in a new excisable product because the process did not amount to manufacture in the absence of a specific statutory definition. The input goods and the exported electroplated goods remained under the same chapter sub-heading, so the goods cleared for export were regarded as the same inputs procured by the assessee. Credit could therefore be reversed for export clearance, and relief linked to duty paid on inputs was accepted. An earlier decision in the assessee's own case was applied despite the different rule regime, and denial of Cenvat credit was held unsustainable.

---

---

Issues: Whether Cenvat credit taken on steel tubes and pipes was liable to be denied when the goods were subjected to cutting and electroplating and exported, on the footing that no new excisable product came into existence.

Analysis: The input steel tubes and pipes and the exported electroplated tubes and pipes fell under the same chapter sub-heading. The process of cutting and electroplating was held not to bring about a new excisable product in the absence of a special statutory definition treating such process as manufacture. On that basis, the goods cleared for export were to be treated as the same inputs procured by the assessee, and clearance could be made on reversal of the Cenvat credit taken. The relief available on exported goods in relation to duty paid on inputs was also accepted. The earlier decision in the assessee's own case was held applicable notwithstanding that it arose under a different rule regime.

Conclusion: The denial of credit was not sustainable, and the order restoring the original authority's decision in favour of the assessee followed.

---