TaxTMI 
TaxTMI 
2024 (11) TMI 124
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....ling/ re-labelling/ affixing of new MRP on the goods 'Clutches' for Automobiles falling under CETH 87089300 of the Central Excise Tariff Act, 1985 which amounts to manufacture in terms of Section 2(f)(iii) of the Central Excise Act, 1944. The Appellant is availing CENVAT credit on the clutches received for the above activities. During the period 01.04.2012 to 09.05.2012 the Appellant had wrongly availed credit in contravention of Rule 3 of CENVAT Credit Rules, 2004 in respect of some consignments on which they had not carried out any activities amounting to manufacture. Hence a Show Cause Notice (SCN) No. 32/2013 dated 29.04.2013 was issued to the Appellant demanding an amount of Rs.1,70,46,634/- under Rule 14 of CCR, 2004 read with Section 11A(1)/11A(5) of CEA, 1944 along with interest besides proposal to impose penalty under Rule 15 of CCR, 2004. The Show Cause Notice also proposed to demand Rs.33,53,720/- accumulated on exports which was adjusted from the ineligible CENVAT credit for payment of duty under Section 11AA of CEA, 1944 along with interest besides proposal for penalty under Rule 25 of Central Excise Rules, 2002. 2.2 After the due process of adjudication, the Order-in....
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....tatute as has been held recently by the Hon'ble Andhra Pradesh High Court in the case of Maa Mahamaya India Ltd. v. CCE, C & ST, Vishakhapatnam-I - 2014 (310) E.L.T. 244 (A.P.). Also, we find that the Co-ordinate Bench at Mumbai in M/s. Bhatia Global Trading Ltd. v. Commissioner Customs (Preventive), Mumbai (supra) has dismissed the appeals filed after 6-8-2014 for non-compliance with the statutory requirement of pre-deposit. In view of the above, these appeals are not maintainable and accordingly, the same are dismissed." 3.1 The Ld. Counsel Shri S. Durairaj representing the Appellant has submitted that the Appellant which is Unit II is engaged in the activities of packing/ re-packing/ labelling/ re-labelling/ affixing of new MRP on the goods 'clutches' for automobiles falling under CETH 87089300 which amount to manufacture in terms of Section 2(f)(iii) of the Central Excise Act, 1944 read with Sl.No. 100 of Schedule-III of CETA, 1985 and Sl.No. 108 of Notification No. 49/2008-(NT) dated 24.12.2008 and assessments were under Section 4A- MRP assessment. He has further submitted that: - i. Even if there is no manufacturing process undertaken by the Appellant, it would have to be ....
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....during the period from 01.04.2012 to 09.05.2012, Unit-II received the clutches from Unit-I on payment of duty under MRP. Unit-II took credit and cleared the clutches as such on payment of duty. Whereas, the Show Cause Notice No. 32/2013 dated 29.04.2013 denied the credit of Rs.1,70,46,634/- by alleging that there is no manufacture. 3.3 Being aggrieved by the Order-in-Appeal No.71/2017-SLM-CEX dated 31.11.2017, the Appellant preferred an appeal before this Tribunal. Appellant claimed that the amount of Rs. 1,36,92,914/-, which was already paid, must be treated as pre-deposit since the credit was not utilized for any other purpose but utilized for the payment of duty on the same goods for which the credit was denied. Appeal was admitted in Appeal No: E/40771/2018-DB. However, for the appeal for the earlier period from September 2010 to March 2012, which was filed subsequently, defect was raised for non-payment of deposit. Appellant was heard on 11.8.2022 and the Bench decided that pre-deposit should be paid. Appellant sought time to pay the pre deposit and accordingly paid the pre deposit. Appeal was numbered as 40067 of 2023. Since the current issue is for the subsequent period, Ap....
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....pellant for non-payment of pre-deposit. On the issue of pre-deposit involved in this appeal, we find that: - i. Appellant claimed that the amount of Rs.1,36,92,914/-, which was already paid, has to be treated as a pre-deposit since the credit was not utilized for any other purpose but utilized for the payment of duty on the same goods for which the credit was denied. However, the adjudicating authority as well as the Commissioner (Appeals) has held that the issue is regarding ineligible credit and not the payment of duty on the clearance of goods. ii. The Ld. Counsel has put forth that the findings of the Adjudicating Authority and the Commissioner (Appeals) are not sustainable on the issue of pre-deposit in view of the decision rendered in the case of Neel Kamal Polytex Industries Vs CCE, Bhopal [2012 (286) ELT 392] wherein it was held that : - "6. The case of the department is that the process undertaken by the appellant unit i.e. printing of polypropylene woven bags does not amount to manufacture and hence they are not eligible for Cenvat credit. However, Rule 3(5) of the Cenvat Credit Rules, 2004 provides that when the Cenvat credit availed inputs are cleared as such, an ....
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.... taken up for decision. 8. The admitted facts are that the Appellant is engaged in the activities of packing/ re-packing/ labelling/ re-labelling/ affixing of new MRP on the goods 'Clutches' procured from their vendors which amount to manufacture in terms of Section 2(f)(iii) of the Central Excise Act, 1994 which were cleared on payment of duty under Section 4A of the Central Excise Act, 1944. However, in respect of the goods procured from their Unit 1 from 01.04.2012 to 09.05.2012 which were not subjected to the above process as contemplated under Section 2(f)(iii) of the Central Excise Act, 1994 and as such, they could not considered as inputs and the credit taken on such items is not in accordance with the law and they are not eligible for the CENVAT credit availed to an extent of Rs.1,70,46,634/- was the stand of the Revenue for initiation of these proceedings against the Appellant. 9. We find that for the earlier period in the Appellant's own case, the Tribunal Chennai has passed an order vide Final Order No. 40187/2024 dated 21.02.2024 allowing the Appellant's appeal. The facts being identical, the decision is squarely applicable. The relevant portion of the decision is as ....
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....09 (243) E.L.T. A 121] by dismissing the SLP filed by the Revenue." 3.3. The Tribunal in the case of "Domino Printech India Pvt. Ltd. Vs. CCE & ST Gurgaon, Haryana 2019-TIOL-3428-CESTAT-Chandigarh" had occasion to consider similar issue and observed as under : "11. We find that the imported ink container, the appellant has availed credit of CVD paid by them on the premise that the activity of refilling / relabelling. As discussed above, as per Chapter Note 7 to Chapter 32, the activity undertaken by the appellant does not amount to manufacture. Therefore, the appellant is not entitled to avail credit of CVO paid by them at time of import. But as per the decision of the Hon'ble Bombay in the case of Ajinkya Enterprises (supra), by upholding the finding of this Tribunal that if the activity does not amount to manufacture and the goods have been cleared on payment of duty, in such case, the duty paid by the assessee which has been accepted by the department and more than the credit availed. In that circumstances, the duty paid by the assessee shall amount to reversal of credit and the assessee is not required to reverse the credit. Admittedly in this case, the appellant clear....
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....ment, CENVAT credit availed need not be reversed even if the activity does not amount to manufacture. Admittedly, similar view taken by the Gujarat High Court in the case of Creative Enterprises has been upheld by the Apex Court (see 2009 (243) E.L.T. A121) by dismissing the SLP Bled by the Revenue." 6. In view of the judgement of the Hon'ble Bombay High Court, the impugned order is devoid of merit and consequently, the same is set aside and the appeal is allowed with consequential relief, if any, as per law." 3.5. Similarly, in the case of M/s. Tristar Enterprises Vs. CCE Mumbai, 2019-TIOL-3247-CESTAT, Mumbai, it was held that once duty is paid on finished products and accepted by the department, the CENVAT credit availed on the inputs need not be reversed even if the activity does not amount to manufacture. "5. We have carefully considered the submissions advance by both sides. The short issue involved in the present appeal for determination is whether the assessee is entitled to CENVAT credit of duty paid on raw materials which were processed and resulted into finished product and cleared on payment of duty. The allegation of the Revenue is that since the process of manufa....