TaxTMI 
TaxTMI 
2018 (4) TMI 1492
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....ated 28.2.1999 and Notification No.25/2002-Cus dated 01.03.2002, as applicable during the relevant period and also registered with the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods), Rules, 1996. A show cause notice dated 6.12.2006 was issued to the appellant that the activity of metalizing does not amount to manufacture and consequently the assessee was not entitled to take credit of the inputs. Consequently, the benefit of the aforesaid exemption notifications was also not available. The assessee had filed a refund under Rule 5 of the Cenvat Credit Rules, 2004 which was sought to be denied by issuance of a show cause notice dated 2.2.2007 for Cenvat credit remaining unutilized in their Cenvat account on export of goods. For entertaining refund claim, a show cause notice dated 2.2.2007 was issued to the appellant on the ground that as the activity undertaken by the appellant does not amount to manufacture. Therefore, the appellant is not entitled for refund of Cenvat credit. The adjudicating authority has held that the activity of metalizing amounts to manufacture, therefore, dropped the proceedings proposed in the show cause notice dated....
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....as is concerned. A process which would not amount to manufacture under the Excise Act would still be considered as manufacture for the purpose of export benefit. There is no requirement under Rule 5 of Cenvat Credit Rules, 2004 that the activity must amount to manufacture for a refund to be granted. Therefore, the refund claim is to be allowed. 6. On the other hand, Ld.AR has relied upon the decision of the Hon'ble Supreme Court in the case of Metelex India (supra) and submits that the transformation of film does not amount to amount, therefore, the assessee is not entitled to avail Cenvat credit and consequently, refund claim of Cenvat credit is not admissible to the assessee. 7. Heard the parties and perused the record. 8. On careful consideration of the submissions made by both sides, we find that the process of manufacture has been explained by Shri R. Rohila, working as Production Manager with the assessee. The same is reproduced as under:- 4. Whereas, a statement of Shri R.Rohila, working as Production Manager with the Noticee was recorded under Section 14 of the Act. In his statement dated 15.07.2005, Shri Rohilla, interalia stated that their raw materials were P....
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....99-Cus dated 28.2.1999 and Notification No.25/2002-Cus dated 01.03.2002. For better appreciation, both the notifications are reproduced below:- Notification No.25/99-Cus dated 28.2.1999: GENERAL EXEMPTION NO.160 Concessional rate of duty on goods imported for the manufacture of excisable goods - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (3) of Table below, and falling under the Chapters of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) specified in the corresponding entry in column (2) of the said Table, when imported into India for use in the manufacture of the finished goods specified in the corresponding entry in column (4) of the said Table, from so much of that portion of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of the amount calculated at the rate of, - (a) Nil in the case of the imported goods specified in List A; and (b) 5% ad valorem in the case of the imported goods specified in List ....
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....n mixer EF 60; LCR bridge; low temperature chamber; humidity chamber; insulation resistance tester; calibration standards Capacitors ; Electronic capacitor grade metallised plastic films for capacitors. 11. We have seen that as per notifications extracted hereinabove, There is great deal of difference between description of imported goods and description of finished goods. If the description of imported goods and description of finished goods are same, then the notifications become redundant , it is not intention of the legislation. From the tenor of the notification, it is clear that inputs procured by the assessee are altogether different from the goods manufactured by the assessee. Therefore, as the name, character and use of the product has been changed. In that circumstance, the activity undertaken by the assessee shall amount to manufacture. 12. We further take note of the fact that the Revenue is heavily relying on the decision of Hon'ble Supreme Court in the case of Metalex India Pvt.Ltd (supra). In the said case, the case of the Revenue is that the activity of lamination/metalizing amounts to manufacture whereas the assessee was claiming that the product is a film....