TaxTMI 
TaxTMI 
2023 (7) TMI 943
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....dent cannot take credit of any amount which is not a payment of duty in terms of Section 3, the department also placed reliance on the Circular No. 940/01/2011-CX dated 14.01.2011 though the Adjudicating Authority has denied the Cenvat Credit but Learned Commissioner (Appeal), in appeals filed by the respondent allowed the appeal therefore the present appeal filed by the revenue. The respondent also filed a cross objection. 2. Shri Tara Prakash, Learned Deputy Commissioner (AR), appearing on behalf of the revenue submits that since the capital goods were exempted under Notification No. 49/2006-CE dated 30.12.2006, whatever, duty paid by the supplier cannot be treated as duty whereas the Cenvat credit is available only in respect of Excise duty paid in terms Section 3 of Central Excise Act, 1944. Therefore, the appellant is not eligible for Cenvat credit in this position. The Learned Commissioner (Appeals) has erred in allowing the appeal of the respondent, which deserves to be set aside and revenue's appeal be allowed. 3. On the other hand Shri Prakash Shah, Learned counsel with Shri Mihir Mehta, Advocate appearing for the respondent at the outset submits that the supplier have m....
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....ty paid by the supplier manufacturer was refunded to them. In this support he placed reliance on following judgment: * Commissioner of C. Ex., Vadodara - I vs. Hylite Cables, 2007 (212) E.L.T. 284 (Tri.- Ahmd.) * Evergreen Engineering Co. Pvt. Ltd. vs Commissioner of C. ex., Mumbai reported in 2007 (215) E.L.T. 134 (Tri. - Mumbai) 3.3 He further submits that the Show Cause Notice for the period of October-2008 to July-2012 was issued on 09.05.2013 and a major part of the demand is beyond one year, which is hit by limitation, as there is no suppression of fact on the part of the respondent. On this ground also a major amount that is within the extended period, the demand of Cenvat credit is not sustainable. 4. We have carefully considered the submission made by both the sides and perused the records. We find that the case can be decided on the first issue assuming the Capital Goods received by the appellant is exempted at the suppliers and we find there is no dispute on the fact that the supplier are registered with Central Excise, they have duly discharged the payment of Excise duty, they have issued invoices and filed their returns to their Jurisdiction Central Excise Office....
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.... operation, they have cleared the goods at lower value than the landing cost of semifinished received from their unit, viz., MDS Switchgear, Malegaon, Sinnar. The Revenue, after a detailed verification of record, came to the conclusion that the cost of semi-finished goods supplied by their sister concern is arrived at by adding the raw material cost, direct/indirect labour cost, average overheads, notional profit and Modvat element. Further, the cost so arrived is rounded off to the next higher figure, i.e., for item Code No. T161B06S, the cost of Rs. 56.68 has been rounded off to Rs. 60/- whereas the assessable value declared by the assessee is ranging between Rs. 45.20 to 52.47. 4. The Revenue issued a show cause notice dated 4-11-1999 to the assessee being of the opinion that they have deliberately entered into practice of raising value of semi-finished goods by adding Modvat element and rounding off the value to higher figure so as to pass on the excess Modvat credit. The said notice was, thus, issued to show cause as to why Modvat credit amounting to Rs. 13,08,701/- should not be disallowed under Rule 57-I of the Rules read with proviso to Section 11A(1) of the Central Exci....
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....terprises (Supra) passed the following order: "Originally when the appeal was filed, the following question was proposed by appellant-revenue. (a) Whether in the facts and circumstances of the case, the Tribunal is justified in holding that the respondent could have availed of Modvat credit in respect of the goods which could not undergo the process of manufacture within the meaning of Section 2(f) of the Central Excise Act, 1944 and in respect whereof, the respondent-assessee had paid duty on its own though not required under the law to pay? The same was subsequently re-framed and the re-framed question reads as under : (1) Whether, in the facts and circumstances of the case, the tribunal is justified in granting benefit of Modvat credit despite the final product not being as a result of activity of manufacture within the meaning of Section 2(f) of the Central Excise Act, 1944? 2. Heard Mr. H.C. Buch, learned Additional Standing Counsel for the appellant-revenue. The learned counsel has read extensively from the show cause notice and the order made by the adjudicating authority to contend that the respondent was not a manufacturer but was merely an agent of Dr. Beck ....
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....therein, held by the Apex Court in the cases of Prestige Engg. (I) Ltd. v. Collector - 1994 (73) E.L.T. 497 (S.C.) and Collr. v. S.D. Fine Chemicals P. Ltd. - 1995 (77) E.L.T. 49 (S.C.). In the appellant's case, though the process involved is of repacking, but repacking with conscious and specific end-use in view. In other words, repacking makes the products marketable. In the cases of J.K. Synthetics Ltd. v. Collector - 1998 E.L.T. 310 (T) and Ponds India Ltd. v. Collector - 1993 (63) E.L.T. 3 (Mad.), it is held that "Manufacturing process continues till the article is put in suitable packaging to smaller packages. I find that the appellant had availed Modvat credit of Rs. 1,70,53,294.00 on the goods received in bulk packs whereas the appellant paid excise duty amounting to Rs. 1,95,03,939.00 on the final product i.e. the re-packed goods in small packs. Accordingly, the process has to be treated as amounting to manufacture. 5. With regard to Modvat credit on duty paid inputs, I find that the appellant has received duty paid raw materials, the said raw material has been received in the factory and were utilized in the manufacture of final products. In view of this and considerin....