Cenvat credit on duty-paid bright bars was upheld despite the suppliers' process not amounting to manufacture.

Cenvat credit on bright bars was held admissible where duty had been paid by the suppliers and the goods were received against duty-paid invoices from registered dealers. The Tribunal followed earlier decisions holding that credit need not be reversed merely because the suppliers' activity was later found not to amount to manufacture. The demand, interest and penalty were therefore unsustainable.

---

---

Issues: Whether Cenvat credit on bright bars was admissible when duty had been paid by the suppliers even though the activity undertaken by them did not amount to manufacture.

Analysis: The appeal turned on the eligibility of credit on inputs purchased from registered dealers against duty-paid invoices. The Tribunal noted that the same issue had already been decided in favour of assessees in earlier decisions, including cases where duty paid on the goods was accepted and credit was not required to be reversed merely because the suppliers' activity was held not to amount to manufacture.

Conclusion: Cenvat credit could not be denied on the ground that the suppliers' process did not amount to manufacture, and the demand, interest and penalty were unsustainable.

---