2016 (6) TMI 870

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....he appellants were registered with the Central Excise department and were clearing their final product on payment of duty after availing the benefit of Cenvat Credit of duty paid on inputs. 2. However, as the appellant was doing galvanization on H B wire procured from other manufacturers and inasmuch as the galvanization process does not amount to manufacture, they were neither availing any cenvat credit of duty paid on the inputs nor were discharging any duty liability on the final product and the Cenvat Credit account was being maintained separately for different types of inputs. 3. With effect from 1999-2002, the appellants started availing cenvat credit on the entire common inputs used in the manufacture of dutiable products as al....

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....om wire of higher gauge has been held to be a process not amounting to manufacture. Similarly, it is accepted position by both the sides that process of galvanization does not amount to manufacture thus calling for non payment of duty of excise on the said process. 6. The question is as to whether in such a scenario, the appellant can avail the cenvat credit of duty on the inputs used in the manufacture of such products and can clear such products on payment of 8% of value of said products in terms of provisions of Rule 6(3)(b). It cannot be out of place to mention here that the said goods stand mentioned in the Central Excise Tariff attracting 16% duty on ad valoram basis. The appellants contention is that though the process adopted by ....

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....is required to be paid on the galvanized wire inasmuch as there was no manufacturing activity involved and thus reason that he is not paying full rate of duty of 16% on the said goods at the time of clearance of the same and on the other, he is claiming the applicability of Rule 6(3)(b) on the ground that said goods are dutiable but exempted. Such an interpretation if adopted would lead to total chaos. Even at the cost of repetition, it may be observed that appellant has not cleared their final product on full payment of duty of 16% in which case credit could have been allowed to them, as per settled proposition of law. 8. Having held that Rule 6(3)(b) is applicable only in respect of exempted products, we proceed to decide as to what ar....