2025 (8) TMI 565 - AT - Central Excise

CESTAT Allows Cenvat Credit on Bright Bars, Finds No Duty on Suppliers Under Relevant Rules

The CESTAT Chandigarh allowed the appeal, setting aside the order denying Cenvat credit on bright bars along with interest and penalty. The Tribunal held ... Denial of Cenvat credit availed by the appellant on bright bars along with interest and equal penalty - no manufacturing process was involved in making bright bars from the bars and rod and therefore no duty was required to be paid by the suppliers of these bright bars - HELD THAT:- The isssue is squarely covered in favour of the appellant by various decisions cited (Supra). Further, in the case of M/s O K Auto Components Pvt. Ltd. Cited [2025 (6) TMI 839 - CESTAT CHANDIGARH], this Tribunal after considering the various decisions has allowed the appeal of the appellant. The impugned order is not sustainable in law. Therefore, the same is set aside - Appeal allowed. 1. ISSUES:1.1 Whether Cenvat credit of central excise duty paid on inputs (bright bars) is admissible where the supplier's process did not amount to 'manufacture'.1.2 Whether a demand denying such Cenvat credit, together with interest and equal penalty, is sustainable when the suppliers had paid central excise duty on the inputs.1.3 Whether the issue is 'no more res integra' insofar as prior decisions of the Tribunal and other courts on identical facts, unauthorisedly challenged by the department, control subsequent similar demands.2. RULINGS / HOLDINGS:2.1 On admissibility of Cenvat credit: The demand denying Cenvat credit on bright bars is not sustainable; 'Cenvat credit availed need not be reversed even if the activity does not amount to manufacture.' (Court set aside the impugned order and allowed the appeal.)2.2 On demand with interest and penalty: The impugned demand, including interest and equal penalty, is unsustainable in law where suppliers had paid the Central Excise duty on the inputs; the order imposing the demand was set aside with consequential relief as per law.2.3 On finality of precedent: The issue is 'no more res integra' because different Benches of the Tribunal and higher fora have struck down identical demands, and those decisions control the present case where the department has not successfully challenged them.3. RATIONALE:3.1 The Tribunal applied precedent-based reasoning, following earlier decisions holding that where duty on goods cleared by suppliers has been accepted by the department, the recipient's Cenvat credit need not be reversed even if the supplier's activity is held not to amount to manufacture.3.2 The Tribunal expressly relied on prior decisions of different Benches of the Tribunal and higher courts and reproduced the governing principle: 'once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity does not amount to manufacture.'3.3 The decision reflects no dissenting or concurring opinion and constitutes an application of established tribunal and judicial precedents rather than a departure from existing doctrine.