TaxTMI 
TaxTMI 
TaxTMI 
2014 (7) TMI 232
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....roduct cleared by the assessee, the entire exercise is Revenue neutral. He submits that though all the above decisions were placed before the adjudicating authority, he has chosen to ignore the same and has not given any finding as to why the same are not applicable. He also clarifies that whereas the credit availed by them is to the extent of around Rs . 37 crores, the duty paid by them on the final product is around 42 crores. As such, he submits that by using the said credit for payment of duty on the goods cleared by them, the same already stands reversed by them and as such, second time confirmation of the same without there being any whisper of the duty paid by them is neither justified nor warranted. He draws our attention to various decisions, wherein under similar circumstances, denial of credit order was set aside. 3. Ld. Jt. CDR appearing for the Revenue reiterates the findings of the adjudicating authority and submits that once the process undertaken by the appellant does not amount to manufacture, the availment of the credit of duty paid on the inputs, which is permissible only when the said input are used in the manufacture of the dutiable final product, cannot be he....
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....ct. Revenue, on the ground that the said activity does not amount to manufacture, denied the credit of around Rs . 37,03, 91,917/- availed by them during the period 1-2-2007 to 31-10-2009 and utilized, by making debit entries, towards excise duty on their final product. In addition to utilization of the said Modvat credit, the appellant also paid duty in cash to the extent of around six crores. However, the Revenue, while denying the Cenvat credit is absolutely silent about the duty paid by the assessee on their final product, which they were not required to pay on account of the process undertaken by them, not being a manufacturing process. 6. As such, the issue required to be decided in the present case is as to whether such availment of credit, which already stand utilized by them for payment of duty on their final product is required to be denied to them, as held by the lower authorities or no duty is required to be confirmed against the appellant, by denying the credit, as contended by the learned Advocate. "We find that there are number of decisions by the Tribunal, as upheld by the higher Courts which have dealt with the identical issue and have held that the Cenvat ....
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.... assessee on the ground that process of galvanization does not amount to manufacture. Accordingly, the demand raised for disallowing the Cenvat credit on C.R. coils and zinc was held unsustainable as Cenvat credit Rules, 2004 allow the clearance of inputs 'as such' or after partially processing on reversal of Cenvat credit availed on these inputs. 8. Similarly, we may also take note of another decision of the Hon'ble Gujarat High Court in the case of CCE V/s. Delta Corporation 2013 (287) E.L.T. 15 (Guj .) laying down that credit could not be denied on ground that no manufacturing activity was carried on by the assessee. Similarly, the Hon'ble Supreme Court in the case of CCE, Vadodara Vs. Narmada Chematur Pharmaceuticals Ltd. 2005 (179) E.L.T. 276 (S.C.), by taking note of their earlier decision in the case of CCE, Ahmedabad V. Narayan Polyplasts & ors . has observed that the wrongly availed credit utilized for payment of duty and inasmuch as the duty paid and the credit availed were of identical amount, the consequence would be Revenue neutral. 9. The undisputed facts on record are that the appellants were availing the benefit of the Cenvat credit of duty paid on....
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....bove for non-reversal of credit, if any, taken by the buyer of the said product." The contention of the learned JCDR is that the said section has not been considered in any of the judgments relied upon by the appellant. It is her submission that once a statutory provision exist in the act, the same should not be ignored and the appellant, instead of challenging the impugned order before the Tribunal, should have approached the Board for issuance of notification under said section. Ongoing through the said section, we find that the same empowers the Central Government to issue a notification, allowing credit of duty paid on the inputs and used for the manufacture of the final product, which also stand cleared on payment of duty subject to certain conditions. It is clear that the powers to issue notification vests in the Central Government, in terms of the said section. This section does not cast any liability on the assessee to approach the Central Government for the issuance of such a notification. The question to be decided is as to whether when there is no such notification issued by the Central Government, in terms of the said section, whether, there would be any debarring for....
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....ion 5B of the Central Excise Act, 1944, where an assessee, who has paid excise duty on a product under the belief that the same is excisable, but subsequently the process of making the said product, is held by the Court as not amounting to manufacture, in such cases, the Central Government may issue an order for non-reversal of such credit in past cases. 3. In view of above, following instructions are issue:- (i) In cases where the process undertaken by an assessee indisputably does not amount to manufacture, the department should inform the assessee about the correct legal position and advise him not to pay duty and not to avail credit on inputs. (ii) If the assessee has already paid duty, and in a situation where there is no manufacture as held by the Courts subsequently, and facts of the case are covered by the provisions of Section 5B of the Central Excise Act, 1944, the assessee is at liberty to approach the Central Govt. for issue of appropriate notification for regularization of the Cenvat credit availed. 4. Trade & Industry as well as field formations may ....
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....sp; 95. Whenever any authority is conferred with the power to determine certain questions in judicial and / or quasi judicial manner, the authority is required to exercise the power conferred upon him as per his own discretion. This is the essence of judicial and quasi judicial function. The authority exercising such powers cannot be influenced by any directions, instructions or the Circulars that may be issued by any other agency. Consequently, the Circular issued by the respondents cannot be permitted to interfere with the discretion of the judicial and quasi judicial authorities. 96. The power to impose tax is essentially a legislative function and according to our constitutional scheme it cannot be delegated. The Excise Duty which the legislature intends to impose must be imposed directly in accordance with law. By issuing the impugned circular the respondent cannot introduce revenue legislation indirectly. The impugned circular also deserves to be quashed on this ground also." 14. As seen from above, the circulars issued by the Board cannot influence the instructions judicial or ....
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....facture that does not confer right on him to avail input credit under the law. In the case of CCE Vs . Creative Enterprises - 2009 (235) ELT 785 (Guj .) because both the parties agreed the activity to be manufacture, allowing of Cenvat credit against duty liability on the goods manufactured remained unquestioned by Hon'ble High Court. That judgement makes clear that no one can assume an activity to be manufacture and mere assumption does not confer right to Cenvat credit. 21. Issue is also settled in terms of the Circular No. 940/01/2011-CX dated 14.01.2011 and Circular No. 911/01/2010-CX dated 14.01.2011 in this regard. For ready reference both circulars are reproduced Circular No. 911/1/2010- CX., dated 14-1-2010 F.No.267/116/2009-CX8 Subject: Irregular availment of Cenvat credit on certain activities not amounting to manufacture - Regarding. Reference has been received from field formations stating that though certain activities including connectorising, testing, repacking and relabeling of feeder cables, cutting of HR/CR coils into sheets or slitting into strips do not amount to manufacture, such processors are taking Cenvat credit and justifying their Cenvat availment....
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.... of unconditionally fully exempted goods and he cannot avail the CENVAT credit of the duty paid on inputs. 2. It is further clarified that in case the assessee pays nay amount as Excise duty on such exempted goods, the same cannot be allowed as "CENVAT Credit" to the downstream units, as the amount paid by the assessee cannot be termed as "duty of excise" under Rule 3 of the CENVAT Credit Rules, 2004. 3. The amount so paid by the assessee on exemption goods and collected from the buyers by representing it as "duty of excise" will have to be deposited with the Central Government in terms of Section 11D of the Central Excise Act, 1944. Moreover, the CENVAT Credit of such amount utilized by downstream units also needs to be recovered in terms of the Rule 14 of the CENVAT Credit Rules, 2004. 4. Trade & Industry as well as filed formations may be suitably informed. 5. Receipt of this circular may kindly be acknowledged 6. Hindi version will follow. 22. Learned Member (Judicial) held, that even if there is no manufacture and the Cenvat credit is taken and subsequently duty payment is made, it should be deemed ....