2019 (12) TMI 711

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....19 and 15.10.2019. Hence, I proceed to decide the issue on merits. 3. I have heard learned departmental representative and perused the records. 4. The appellant is manufacturer of TMT bars, mild bright steel bars falling under Chapter 72 of Central Excise Tariff Act. They are availing benefit of Cenvat credit under Cenvat Credit Rules (CCR), 2004. It is found by the department that the appellant procured some TMT bars from other manufacturers and sold them under their brand name to customers on payment of duty. They availed Cenvat credit of duties of excise paid by the other manufacturer on TMT bars and utilised the same for payment of excise duty on the final products. A show cause notice was issued to the appellant proposing to deny C....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....products. They purchased the finished products from outside and took Cenvat credit of the duty paid on such products. He would submit that credit of duty is not available except as per CCR, 2004. It is not open for any manufacturer to design his own scheme to avail Cenvat credit but he has to follow the process prescribed under CCR, 2004. These rules provide for credit of (a) inputs, (b) input services & (c) capital goods. Undisputedly the TMT bars are neither their inputs nor their capital goods nor are their input services. Simply because the appellant has chosen to pay an amount calling it an excise duty when clearing TMT bars from the factory, it does not automatically entitle them to avail Cenvat credit in violation of CCR, 2004. As fa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ide for credit of duty paid on inputs and capital goods and service tax paid on input services. Undisputedly, the TMT bars in question do not fall under any of these categories. In the absence of any explicit legal provisions for availment of Cenvat credit, I find that appellant is not entitled to Cenvat credit on TMT bars. I also find that Rule 16 of Central Excise Rules, 2002 do not apply to cases where goods are brought into the factory for resale. This rule applies only to cases where the goods are used for repairing, re-conditioning, etc. I have also considered the argument of the appellant that the entire exercise is revenue neutral because they paid an amount showing it as excise duty while clearing the TMT bars. Revenue neutrality d....