TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 556
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....t and packing, the same would be cleared by the Mangalpur Unit on payment of Excise Duty to different customers. The Appellant, also intimated the aforesaid business plan and process to the Jurisdictional Assistant Commissioner, Asansol Division, vide Letter dated 08-09-2009, (Appeal Paper-Book at Page No. 69). 2. After the unit was visited by Department's CERA audit team in January 2012 and documents were submitted by the appellant, a Show Cause Notice was issued on 28.07.2014 for the extended period of September 2009 to June 2010 on the ground that during the impugned period, the Appellant has procured 2274.980 M.T. of Silico Manganese from the sister unit, i.e. Burdwan Unit and claimed CENVAT Credit of INR 98,51,293/- based on the Excise Invoices issued by them. No manufacturing activity has taken place on such procured goods and hence they have taken ineligible cenvat credit. 3. After due process, the Adjudicating held "I find that the CENVAT Credit scheme is principally based on system of granting credit of duty paid on inputs, capital goods and input services. Rule 3(1) of the CENVAT Credit Rules, 2004 states that a manufacturer or producer of final products and a provider ....
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....actory on payment of the amount equal to the credit availed in respect of such inputs, in accordance with Rule 3(5) of the CENVAT Credit Rules, 2004. 4.4 Without prejudice to aforesaid, even if it is assumed that reprocessing of Silico Manganese by the Appellant through sizing, chemical treatment and packing does not amount to manufacture, in such scenario, Excise Duty paid by Appellant on such reprocessing activity has been accepted by the Department by way of accepting the ER-1 Returns filed, therefore, CENVAT Credit claimed against the same should be allowed in terms with settled position of law 4.5 It is most humbly submitted that even for the sake of argument, it is assumed that reprocessing of Silico Manganese by the Appellant through sizing, chemical treatment and packing does not amount to manufacture, then the Excise Duty paid by Appellant on the same should not have been accepted and refunded back to the Appellant. On the one hand, the Department has accepted Excise Duty paid by Appellant on the alleged activity, which does not amount to manufacture and on another hand, the Department is seeking to disallow CENVAT Credit on the same. Such an act of the Department is aga....
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....ng are undisputed facts of the case - 1) The Silico Manganese procured from the sister unit is duty- paid and there is no dispute on it; 2) The entire quantity of Silico Manganese has been received in the factory and duly accounted for in Input Stock Register and there is no dispute on it; 3) After breaking into required sizes, the said Silico Manganese has been removed from the factory on payment of Excise Duty as well as captively consumed in manufacture of Billets; 4) The amount of credit taken is covered by the amount paid at the time of removal from the factory; 5) it is indisputable that Silico Manganese is an input for the manufacture of the final product namely, M.S. Billet; 6) The appellant has taken the credit on the Silico Manganese immediately on receipt in the factory, in terms of sub-rule (1) of rule 4 of the CENVAT Credit Rules, 2004; 7) The Silico Manganese has been removed from the factory under specified invoice and on payment of the amount of duty, which covers the amount of credit taken on the Silica Manganese; 4.11 Accordingly the above facts and grounds would clearly establish that there is no irregularity in taking the credit on the impugned Si....
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....discharged when the silico manganese has been cleared by the appellant. While the appellant is claiming that such silico manganese cleared by them amounts to manufactured finished goods, as per the Revenue, it is still in the input form since the end product and tariff remains same. We have gone through the ER 1 Return copies filed by the appellant in the Appeal book. The relevant extracts of two such sample Returns are reproduced below : 9. From the above extract it can be seen that in the month of September 2009, they have shown clearance of 810.00 + 66.00 MTs on payment of Excise Duty. They have also accounted for captively consumed and exported Ferro Silico Manganese, giving the details of the same. Similarly in March 2010, they have cleared 81.00 MT and 135.500 MT on payment of Excise Duty also captively consuming 15 MT and exporting 760.00 MT. This clarifies beyond doubt that the goods in question whether cleared after manufacture as is being claimed by the appellant or without manufacturing process, as is being claimed by the Revenue, in both the cases, Excise Duty stands paid. The Dept. even while taking the stand that no manufacturing activity has taken place, has no qual....
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....dit 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 filed by the Revenue." 13. The Kolkata Bench, on an identical issue, in the case of Nilachal Iron & Power Ltd. v. Commissioner Of CGST & Excise, Jamshedpur [(2024) 21 Centax 425 (Tri.-Cal), has held as under: 3. The ld. Counsel for the appellant, submits that although they have availed the cenvat credit on iron ore pellets, but the same were used in their factory and were cleared the same on payment of duty.Therefore, the payment of duty shall amount to reversal of cenvat credit. In that circumstances, the appellants are not liable to reverse the cenvat credit. 6. We find that in this case, although the appellant has taken cenvat credit on iron ore pellets, it has been held that the product of iron ore pellets is exempted from payment of duty and the said goods were used by the appellant for manufacturing process and the manufactured goods have been sold on payment of duty. Therefore, the demand of duty on such iron ....