TaxTMI 
TaxTMI 
2025 (6) TMI 1958
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....terprises. We do not find in the impugned order how the facts in the present case are squarely covered by the decision in the case of Ajinkya Enterprises (Supra). Reasons are live links between the mind of the decision taker to the controversy in question and the decision or conclusion arrived at. In our view, the Tribunal ought to have set forth its reasons, howsoever brief, in its order indicative of an application of its mind, all the more when its order is amenable to further avenue of challenge. 3 Therefore, we set aside the impugned order and remand the matter for denovo consideration. Since the subject matter pertains to year 2005, we would request the Tribunal to dispose the appeal at the earliest and in any case by 31 December 2024." 1.2 Since the matter was not disposed of by the date specified in the above order, the Hon'ble High Court was again approached and by Order dated 21.02.2025 the Hon'ble High Court again extended the date for disposal of the Appeal to 30.06.2025. 2.1 These appeals are directed against Order-in-Original No. 38/BR-38/Th-I/2010 dated 30.07.2010 of the Commissioner of Central Excise, Thane-I. By the impugned order, the Commissioner h....
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.... the provisions of Rule 15( 1 ) of the Cenvat Credit Rules, 2004." 3.1 M/s. GEE Ltd. (Appellant 1) is registered with central excise for manufacture of welding electrodes, M.S. coated wire, S.S. wire, blended powder/flux etc. They were availing the benefit of Cenvat credit scheme. Appellant 2 is Executive Director with Appellant 1 during the period of dispute. 3.2 Intelligence was received that Appellant 1 had imported non alloy copper coated wire of M.S/non alloy solid wire/welding wire and are carrying out processes like cutting, rewinding, branding, testing and repacking on the same and thereafter clearing the same under their own brand name on payment of central excise duty. Against the imported raw materials received, Appellant 1 had taken Cenvat credit of the duty paid on these raw materials. As these processes did not amount to manufacture, the Cenvat credit appeared to be inadmissible to them. 3.3 Investigations were carried on and statement of Shri S.M. Agarwal, Executive Director (Appellant 2) of Appellant 1 was recorded under Section 14 of the Central Excise Act. On completion of investigation, a show cause notice dated 12.05.2010 was issued to the Appellants as....
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....in, Advocate & Shri Rajesh Ostwal, Advocate for the Appellant and Shri Hemant Tantia, Authorized Representaive for the Revenue through E-Hearing. 4.2 Arguing for the appellant learned Counsel submits that:- There is no dispute that the Appellants were paying due central excise duty on their finished products which as per the Revenue were processed out of the imported raw materials referred to earlier and once they were paying the due duty, Cenvat credit in respect of the input raw material taken by them cannot be denied. This view has been supported by the decision of Hon'ble Bombay High Court in the case of Ajinkya Enterprises [2013 (294) ELT 203 (Bom.)]. That being so, the entire basis for making demand against them is not justified. During the course of investigation they were asked to reverse Cenvat credit amount of Rs.3,08,58,313/- which was in respect of the imported raw materials still lying in stock with them or contained in the processed goods. These goods were subsequently allowed to be traded by the revenue for which the Appellants obtained dealer registration and have passed on the benefit of the duty paid on these goods to their buyers. So....
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.... CCE&ST-2016 (333) ELT 101 (T). Mangal Singh Vs. Commissioner of CGST - 2024- TIOL-1032-CESTAT-MUM Geep Industrial Syndicate - 1999 (114) ELT 850 (T) Mahindra & Mahindra Ltd. - 2000 (125) ELT 477 (T) Sushripada Chemicals - 1996 (88) ELT 109 (T) Pioma Industries Vs. CCE-1995 (77) ELT 424 Pasupuleti Venka Pasupuleti Venkateswarlu Vs. The Motor & General Traders (1975) 1 SCC 770 Majati Subbarao Vs. P.V.K. Krishna Rao (Deceased) By Lrs. (1989) 4 SCC 732 Commissioner of Agri. Income-Tax Vs. Amalgamated Tea Estates Co. Ltd. (1970) 77 ITR 455. Combitic Global Vs. UOI - 2024 (6) TMI 498 - BOMBAY HIGH COURT Hindalco Industries Vs. Union of India - 2018-TIOL- 2761-HC-MUM-GST 4.3 Learned Authorised Representative appearing on behalf of the Revenue submits that since the activities does not bring new commercial product into existence there cannot be any manufacture in terms of Section 2(f) (ii) & (i) of the Central Excise Act, 1944. As the activities undertaken by the Appellant did not amounts to manufacture the Cenvat Credit could not have been allowed to the Appellant. Matt....
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.... similarly, they were also not required and eligible to comply with any of the requirements of the provisions of the law and the Rules made thereunder. Yet, they have resorted to it and what is to be examined is that whether such unwarranted compliance can be overlooked, being not a non-compliance which is looked upon by the law. There is no dispute from their side that they have not availed the Cenvat credit facility which by its very definition, in Rule 3 of the Cenvat Credit Rules, 2004 is allowed to the "manufacturer' only. 30. The other main contention made by M/s GEE Ltd. is that the department has forced them to reverse a particular amount on 19.02.10, after that on 20.02.10 they transferred some of the inputs to Trading Account', and the credit getting accumulated due to import of wires was not utilized for payment of duty on their other undisputed dutiable local clearances of other goods (than wire), and some imported wires were also exported as such under bond, and so, in effect, demand is more than the credit taken by them. They have submitted two charts in this regard to support their claim. On study of this contention and the charts given by them, it i....
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....having been found as being not a manufacturer can not claim both of these facilities. Hence the case laws cited by them and argument taken do not help their case. 32. As regards the contention that as there is no revenue implication in the case, the demand and other proposals are not sustainable, it is seen that it is a wrong presentation of the fact that there is no revenue implication in the matter. As discussed in the previous para credit was not lying idle in M/s GEE Ltd.'s account but was utilized by them for making payment of duty", this payment has been passed on by them through Central Excise invoices to their buyers who have availed credit thereon, creating an undesirable Cenvat chain, effecting the revenue of the department. The 'payment' can not be validated as non-revenue-implication, also, because it is originating from an ab initio wrong credit. Treating it is a no-implication matter will also defeat the purpose of whole Central Excise duty which is a duty on manufacture of the goods, and besides taking credit of the duty paid on the inputs, the facility to pass on the credit of duty paid has also to be available to the manufacturer only. ....
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....xcise Law. Thus, his act of taking Cenvat credit on the goods which cannot be treated as input within the meaning of the Cenvat Credit Rules, 2004 is a deliberate attempt to avail the wrong credit and to that extent deprive the exchequer of its lawful tax collection. Further, when he was looking after production and maintaining Central Excise records by way of supervision, it is clearly indicated that he is aware of the fact that the processes carried out by them are not manufacturing process within the meaning of Section 2(1) of the Central Excise Act, 1944, and thus has also dealt with the goods which he knew were not qualifying as 'input'. Here, also his omission is deliberate and conscious effort to evade lawful payment of Central Excise duty by intentionally availing wrong and ineligible Cenvat credit, and therefore, Shri. S. M. Agarwal, Executive Director is liable for penalty under the provisions of Rule 15 (1) of the Cenvat Credit Rules, 2004. The said Rule 15 does not distinguish a person from legal person and so contention that he can not be penalized is also incorrect." 5.3 Undoubtedly in the present case the Appellant was paying the duty on the processed good....
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.... effect that the process of pickling does not amount to manufacture. Therefore, during the relevant period, that is, during the period from 2nd March, 2005 to 31st December, 2005, it could not be said that the issue was settled and that the assessee paid duty on decoiled HR/CR coils knowing fully well that the same were not manufactured goods. If duty on decoiled HR/CR coils was paid bona fide, then availing credit of duty paid on HR/CR coils cannot be faulted. 10. Apart from the above, in the present case, the assessment on decoiled HR/CR coils cleared from the factory of the assessee on payment of duty has neither been reversed nor it is held that the assessee is entitled to refund of duty paid at the time of clearing the decoiled HR/CR coils. In these circumstances, the CESTAT following its decision in the case of Ashok Enterprises - 2008 (221) E.L.T. 586 (T), Super Forgings - 2007 (217) E.L.T. 559 (T), S.A.I.L. - 2007 (220) E.L.T. 520 (T) = 2009 (15) S.T.R. 640 (Tribunal), M.P. Telelinks Limited - 2004 (178) E.L.T. 167 (T) and a decision of the Gujarat High Court in the case of CCE v. Creative Enterprises reported in 2009 (235) E.L.T. 785 (Guj.) has held that once the ....
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....by the Assessee on payment of Central Excise duty even though the process undertaken did not amount to manufacture. The principle contained in this Section 5B is that principle laid down by the Hon'ble High Court in the case of Ajinkya Enterprises (Supra). 5.8 In view of the above decision of the Hon'ble High Court which is referred exactly in similar set of facts whereby the Hon'ble High Court has concluded that the processes undertaken by the Appellant did not amounted to manufacture but the finished goods were being cleared on payment of duty the Cenvat Credit has been allowed. 5.9 Accordingly in view of the decision of the jurisdictional High Court on the subject, we follow the same. Accordingly the demand made seeking to recover the Cenvat credit from the Appellants which is in respect of the processed goods actually cleared by them on payment of central excise duty has to be set aside. 5.10 Undisputedly we find that not all the imported goods against which the appellant had availed the CENVAT credit were processed and cleared on payment of the central excise duty. A part of the said goods were traded as such. The CENVAT credit in respect of such traded goods would no....
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....f Imported Input M S Coated Wire 2007-2009 Sr No Bill of Entry No Date Basic E.Cess S.H Add. Duty Rs Rs Rs Rs 1 752862 18/3/2008 731908 14638 7319 240475 2 723149 25.02.08 1241367 24827 12414 363464 3 637364 19.12.07 367163 7343 3672 107503 4 637730 19.12.07 655889 13118 6559 192040 5 999450 21.11.07 491714 9834 4917 143971 6 982902 07.11.07 600443 12008 6004 175806 7 982926 07.11.07 213926 4279 2139 62706 8 644505 26.12.07 611938 12239 6119 179171 9 840883 23.05.08 1118997 22380 11190 367200 10 844497 26.05.08 3090127 61802 30901 1014026 11 780668 08.04.08 239134 4782 2391 78569 12 792110 17.04.08 410783 8215 4107 134966 13 798199 24.04.08 266649 5332 2666 87609 14 798378 22.04.08 1049780 20995 10497 344914 15 892813 30.06.08 471701 9434 4717 154789 16 892817 30.06.08 1137082 22742 11371 373331 17 892815 30.06.08 3156868 63137 31568 1035927 18 892811 30.06.08 3199528 63991 31995 1049926 19 882575 23.06.08 530207 10604 5302 173987 20 629935 30.09.08 3668447 73388 36694 1203802 21 656311 22.10.08 3919997 78399 39200 1286348 22 925384 23.07.08 1198107 23963 11981 393648 23 936119 30.07.08 3032053 60641 3032....
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....res to certain processes such as spooling, heating, embossing with brand name, testing and packing. The appellants believed that the above processes would amount to manufacture 0, and cleared the MS coated wires on payment of excise duty by utilizing the credit availed "OF oh imported inputs. 5. There was a visit by the central excise department on 19.2.2009. As per department, the processes undertaken by the appellants did not amount to manufacture and hence, credit availed on imported goods is incorrect. 6. The appellants paid excise duty amounting to Rs.2,47,97,561 on the MS coated wires cleared prior to the visit by the department on 19.2.2009. 7. There was certain quantity of imported goods (processed and unprocessed) lying in stock on the date of visit i.e., 19.2.2009. The appellants were forced to shift goods lying in stock from the manufacturing business to trading business. The quantum of credit (CVD + SAD) taken on such imported goods is Rs.1,01,48,308. 8. On 19.2.2009, the appellants were also forced to reverse Rs.3,08,58,322, being the entire amount of credit lying in RG23A register and RG23C register on that day. Document 4 3 9. I say & state that....