2008 (6) TMI 416

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....cise confirmed the demand by way of recovery of Cenvat credit amounting to Rs. 14,49,718/- with interest. He also imposed penalty of equal amount. On appeal, the Commissioner while upholding former part of the order, reduced the penalty to Rs. 2 lacs. 2. We heard the parties on the point of waiver of stay on length. On behalf of the Revenue heavy reliance was placed on the decision of the Supreme Court in Metlex (I) Pvt. Ltd. v. CCE, New Delhi - 2004 (165) E.L.T. 129 (S.C.) and it was submitted that the issue is covered. Having given on careful consideration, we are of the view that the decision does not clinch the issue involved. The Supreme Court, no doubt, held that the affect that the process of metallisation does not result int....

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....are unable to accept this submission. The question is whether an individual and distinct product has come into existence. It is settled law that the burden is on the department to prove that a new and distinct product has come into existence. The Appellants, in reply to the Show Cause Notice, took up the contention that there was no manufacture. If the Department still wanted to contend that manufacture had been undertaken, the Department had to prove it by cogent evidence. The Tribunal was clearly in error in seeking to cast the burden on the Appellants to show that there was no process of manufacture". 3. It would thus be clear that the finding that the 'metallization' does not result in a new product was arrived at in the absence....

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.... is a distinct product different from the 'film' which otherwise is not suitable for packaging ready-to-eat food items from hygienic and medical point of view. We are therefore of the view that the process does amount to 'manufacture' under the Central Excise Act and therefore, the appellant was entitled to take Cenvat credit of the duty paid on films 6. It was submitted by the learned DR that the Tribunal has decided a number of cases following the ratio of Metlex (I) Pvt. Ltd. (supra). In this regard, on behalf of the assessee our attention was drawn to Kuwer Industries Ltd. v. CCE, Noida - 2005 (184) E.L.T. 49 (Tri.-Del.). The said decision of the Tribunal was challenged in the Supreme Court and it was contended that the decision....