TaxTMI 
TaxTMI 
2023 (11) TMI 253
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....apacitor grade metalized dielectric plastic film (MPP film), falling under Chapter 3920 2090 of the CETA, 1985, does not amount of manufacture. The brief facts are as follows: a) The Appellant is engaged in the manufacture of (i) "Capacitors" falling under sub-heading No.8532 2500 and (ii) Electronic Capacitor Grade Metallized Dielectric Plastic Film (MPP Film) falling under Chapter 3920 2090 of the Central Excise Tariff Act, 1985. b) The Production process of Capacitor begins with making MPP out of Plain Plastic Film. In addition to captive use of MPP in the capacitor, MPP are cleared to DTA and are also exported. c) The case of the department in the present proceedings is that the process of making MPP from plastic film does not amo....
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....2007 that the process of metallization would amount to manufacture and is liable to duty. Further, the authorities did not object to the payment of excise duty at any point of time immediately after the said judgement of the Apex Court. c) Therefore, the Appellant also entertained a bonafide belief that the process of metallization amounts to manufacture and consequently paid duty on clearance of MPP Film. d) The Appellant submits that the judgment in the case of Metalex (supra) is not applicable in the facts and circumstances of the present case. In the case of Metalex, the Hon'ble Supreme Court came to the conclusion that the activity of metallization does not amount to manufacture only on the ground that the department has not discha....
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....pex court and held that the process amounts to manufacture. This decision is affirmed by the Hon'ble High Court of Bombay in the case of Commissioner Vs. Paper Products reported at [2015 (320) E.L.T. A200 (Bom)]. 4. By way of alternate submission, learned Counsel further submits as follows: a) The MPP Films were cleared to DTA on payment of duty. Without prejudice to the above submissions, that the Appellant has undertaken manufacturing activity, credit cannot be denied as the output excise duty is discharged by the Appellant to the tune of Rs. 79,18,512/- as against credit availed amounting to Rs. 60,60,706/-. b) In this regard, reliance is placed on the decision in the case of M/s. CCE, Bangalore Vs. Vishal Precision Steel Tubes and ....
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....s has been upheld by the Apex Court [see 2009 (243) E.L.T. A121] by dismissing the SLP filed by the Revenue.". d) Further reliance is placed on the following decisions: i) R.B. Steel Services Vs. CCE, Rohtak - 2015 (318) E.L.T. 139 (Tri-Del) ii) Commissioner Vs. Creative enterprises- 2009 (235) E.L.T. 785 affirmed by the Apex Court in 2009 (243) E.L.T. A120 (S.C.) iii) CCE, Aurangabad Vs. Sunrise Industries - 2015(315) E.L.T 62 (Tri- Mum) e) The Appellant further submits that 3,18,903.943 kgs (Credit amount of Rs. 1,74,86,134/-) of MPP is consumed captively in the manufacture of capacitors on which duty is paid and hence credit cannot be denied. Reliance is placed on the decision in the case of M/s. Needle Industries Limited Vs. ....
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....which are used for final dutiable product even if the final products are exempt from payment of duty subsequently. In this regard, reliance is placed on: (i) Principal Commissioner v. TVS Electronics Ltd. - 2017 (356) E.L.T. A88 (Mad.)] (ii) Tractor and Farm Equipment[2015 (320) E.L.T. 357 (Mad.)]. j) In the present case the final product i.e., capacitor is a dutiable good and therefore, there is no basis for reversal of cenvat credit taken on inputs. k) The Appellant submits that Zinc Ingots are used for manufacture of dutiable goods i.e., capacitors and hence credit cannot be denied for an amount of Rs. 11,94,038/-. l) The Appellant has availed credit of Rs. 1,83,40,731/- on various inputs used for MPP exported. The Appellant su....
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.... Impugned Order. 7. Having considered the rival contentions, we find that the issue whether the process of making MPP film amounts to manufacture or not is no longer res integra as amendment to the CETA, wherein, in Chapter Note 16 to Chapter 39, was added. We further find that under similar facts and circumstances, the Coordinate Bench of this Tribunal at Mumbai in the case of Paper Products Ltd vs CCE, Mumbai [2014 (304) ELT 145] have distinguished the ruling of Hon'ble Supreme Court in the case of Metalex India Pvt Ltd vs CCE [2014 (165) ELT 129 (SC)] and have held that under similar facts and circumstances, the process amounts to manufacture. We further find that Coordinate Bench in Chandigarh in the case of Dhruv Industries Ltd vs CCE....