2025 (7) TMI 925

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.... a small business that undertakes 're-packing and labelling' for principal manufacturer. They had, accordingly, discharged duty liability at their end while taking credit of taxes/duties paid by them for input goods. 2. In dispute is credit of Rs. 15,87,927, that had been taken during the period from November 2007 to September 2012, and demand thereof confirmed under rule 14 CENVAT Credit Rules, 2014, along with applicable interest, and penalty of like amount imposed under rule 15 of CENVAT Credit Rules, 2004. 3. It is the contention of the Learned Consultant for the appellant that their activity of re-packing of chemicals covered 14 different headings of First Schedule to Customs Tariff Act, 1975 and that, in terms of chapter notes perta....

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....thing which is not prohibited, if at the time of removal of Cenvat credit availed inputs, in terms of the provisions of Rule 3(5) of the Cenvat Credit Rules, 2004, an amount equal to the Cenvat credit availed is paid under an invoice issued under Rule 9 of the Central Excise Rules, 2002. There is no dispute that the amount paid by the appellant is more than the Cenvat credit availed. In my view, therefore, the assessee should not be penalized for paying more amount than their actual duty liability. Since Rule 3(5) itself requires that removal of cenvated inputs as such on payment of an amount equal to the Cenvat credit availed has to be under an invoice issued under Rule 9 of the Central Excise Rules, 2002 and since in terms of the Rule 9(1....

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....uty is levied, Modvat credit cannot be denied by holding that there is no manufacture.' 7. In A One Laminators Pvt Ltd v. Commissioner of Central Excise [2012 (276) ELT 172 (Del.)], it had been held '5. The neat submission made by the learned counsel for the appellant is that if the aforesaid process is not to be treated as manufacturing process and the appellants are not entitled to Cenvat credit on that basis, then the appellants were also not required to pay any excise duty. It is also pointed out that the excise duty paid by the appellants is much more than the Cenvat credit availed by the appellant. It is also pointed out that Cenvat credit was not claimed or paid to the appellant in cash but was utilized in payment of excise duty ....