2016 (5) TMI 835

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....g Welding Wir, which is normally used as welding electrode in wire form. The respondent availed Cenvat Credit on duty paid wire rods and clears the welding wire on payment of duty. The department has initiated the action and contended that the activity of conversion of steel wire rod into Copper Coated CO2 Mig Welding Wires involves the process of drawing of wire. The drawing of wire does not amount to manufacture in the light of Hon'ble Supreme Court judgment in the case of Collector of Central Excise Vs. Technoweld Industries 2003 (155) ELT 209 (S.C.). The adjudicating authority held that no Cenvat Credit is admissible on input namely wire rod as the process of conversion of wire rod into Copper Coated CO2 Mig Welding Wires is not to be considered as process of manufacture. Aggrieved by the adjudication order dt. 20.2.2004, the appellant filed appeal before the Commissioner (Appeals). The Ld. Commissioner (Appeals) while allowing the appeal held that the activity of the respondent is conversion of wire rod into Copper Coated CO2 Mig Welding Wire, which not only involved the process of drawing of the wire but it also involves the process of copper coating. He further held that Ho....

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....015-TIOL-1172-CESTAT-MUM 4. On the other hand, Shri R.V. Shetty Ld. Counsel for the respondent submits that the process involved is not only drawing of wire but it involves pickling of wire annealing and copper coating. The resultant product is welding wire therefore it is not a case of only drawing of wire from wire rod, but it involves the manufacturing of welding electrode in wire form from the steel wire rod. Therefore the judgment of Hon'ble Supreme Court in the case of Technoweld Industries (supra) does not apply in the facts of the present case. He further submits that in the whole proceeding the case of the Revenue is since the activity does not amount to manufacture the respondent is not entitled for Cenvat Credit. He submits that even if it is presumed that Cenvat Credit is not admissible but since the respondent has cleared the processed goods on payment of duty. The Cenvat credit availed stand paid back in the form of excise duty on the clearance of Copper Coated CO2 Mig Welding Wire, for this reason also there is no reason to deny the Cenvat Credit. 5. We have carefully considered the submissions made by both the sides. We find that even without going into the as....

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....ackground of the aforesaid facts as well as the submissions advanced by the learned advocates for the respective parties, it is apparent that the impugned order passed by the Commissioner (Appeals) is based upon the decision of the Supreme Court in the case of Commissioner of Central Excise v. Technoweld Industries (supra), holding that the process of drawing wires does not amount to manufacture. 14. Sub-section (1) of Section 39 of the Taxation Laws (Amendment) Act, 2006, as is relevant for the present, reads thus : "39. (1) In the Central Excise Rules, 2002, made by the Central Government in exercise of the powers conferred by section 37 of the Central Excise Act, rule 16 thereof as published in the Official Gazette vide notification of the Government of India in the Ministry of Finance (Department of Revenue), No. G.S.R. 143(E), dated the 1st March 2002 shall stand amended and shall be deemed to have been amended retrospectively in the manner as specified in column (2) of the Schedule for the period specified in column (3) of that Schedule against the rule specified in column (1) of that Schedule. (2) Notwithstanding anything contained in any judgment,....

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.... Provided further that the amount paid under the first proviso shall be allowed as CENVAT credit as if it was duty paid by the assessee who removes the goods." 17. Thus, the persons like the petitioners are termed to be "assessee" within the meaning of Rule 16 of the Rules. Rule 16 of the Rules lays down that where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take Cenvat credit of the duty paid as if such goods are received as inputs under the Cenvat Credit Rules, 2002 and utilize this credit according to the Rules. By virtue of the amendment, the petitioner is an assessee within the meaning of Rule 16 of the Rules and as such, would be entitled to avail of Cenvat credit in accordance with the Rules. 18. Examining the facts of the present case in the light of the aforesaid amendment in the statutory provisions, the impugned order dated 8-6-2005 passed by the Commissioner (Appeals) as well as the orders in-original dated 20-12-2004 passed by the adjud....

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....efund, the respondent would not be eligible for Cenvat credit. For this purpose, the matter has to be remanded to the original adjudicating authority. 8. In view of the above, discussion, the impugned order is set aside and the matter is remanded to the original adjudicating authority for de novo adjudication in the light of observation in paras 6 & 7 above. The Revenue's appeal stands disposed of as above." (iv) Venus Wire Industries Pvt. Ltd. Versus Commr. Of C. Ex., Raigad2008 (224) E.L.T. 495 (Tri. - Mumbai) held that- "5. On perusal of the record we find that the Board Circular dated 26-7-2006 gave the clarification on the retrospective amendments to Rule 16. We may read the specific paragraph :- "The retrospective amendment in Rule 16 is aimed at facilitating wire drawing units, which had paid a sum equal to the duty leviable on drawn wire after availing the credit of duty paid on inputs for the said period. It is aimed at regularizing availment of credits at two stages and payment of an amount representing duty at one stage. The purpose of the amendment is to regularize credit taken at the input stage (on wire-rod), credit taken by the downstrea....