Cenvat credit cannot be denied by holding that the activity is not 'manufacture', when the Department had accepted the Excise duty liability on final products
PrintListen to this Article
Cenvat credit cannot be denied by holding that the activity is not 'manufacture', when the Department had accepted the Excise duty liability on final products
We are sharing with you an important judgment of Hon’ble CESTAT, Mumbai, in the case of Foam Techniques MFG (I) Pvt. Ltd. Vs. CCE, THANE-I [2015-TIOL-156-CESTAT-MUM] on the following issue:
Issue:
Whether the Cenvat credit can be denied by holding that the activity is not 'manufacture', when the Department had accepted the Excise duty liability on final products?
Facts & background:
Foam Techniques MFG (I) Pvt. Ltd.(“the Appellant”) was engaged in the business of manufacture of P.U. foam sheets and availing the benefit of Cenvat credit. The Appellant had procured blocks of P.U. foam covered under Chapter Heading No. 3920 or 3921 and cut them into different sizes & shapes and the final product P.U. foam sheet covered under Chapter Heading 3926 was cleared to the customer after the payment of Excise duty (“the activity”).
The Department had taken a view that the activity undertaken by the Appellant does not amount to ‘manufacture’ and hence the availment of Cenvat credit on P.U. foam blocks was irregular. Later the Adjudicating Authority and the Commissioner (Appeals) confirmed the demand for recovery of the Cenvat credit irregularly availed along with imposition of interest and penalty.
Held:
Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Mumbai.
The Hon’ble CESTAT, Mumbai relied upon the following case laws:
· CCE Surat-III Vs. Creative Enterprises [2009 (235) ELT 0785 (Guj.)] further, upheld by the Hon'ble Supreme Court [2009 (243) ELT A 120 (SC)]
· CCE, Pune-III Vs. Ajinkya Enterprises [2013 (294) ELT 0203 (Bom.)]
and held the following:
Neither the Adjudication Authority nor the Appellate Authority had disputed the classification of goods during the whole process. It shows that the original inputs i.e. P.U. foam block were converted into P.U. foam sheet, indicating that the original inputs, P.U. foam block, has undergone change and is now a product other than the inputs which were procured by the Appellant;
Since the Appellant had discharged his duty liability on the final products which they had considered as manufactured product and the Department had also accepted the same, the Appellant is rightfully entitled to avail credit.
Therefore, the Hon’ble Tribunal allowed the Cenvat credit availed by the Appellant.
Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us.
Thanks & Best Regards,
Bimal Jain
FCA, FCS, LLB, B.Com (Hons)
Delhi:
Flat No. 34B, Ground Floor, Pocket - 1,
Mayur Vihar, Phase - I,
Delhi – 110091, India
Desktel: +91-11-22757595/ 42427056
Mobile: +91 9810604563
Email: bimaljain@hotmail.com
Category : Excise | Comments : 0 | Hits : 208
The scheme of levy and collection of Central Excise duty on articles of Jewellery is as under: (a) The levy and collection of Central Excise Duty is on the manufacture of Jewellery (excluding silver Jewellery, not studded with diamonds, ruby, emerald or sapphire). (b) It is applicable to both branded as well as unbranded Jewellery. (c) The rate of duty on the Jewellery are as follows: (i) 1% on transaction value [without Cenvat credit on inputs and capital goods...
Clarifications on Excise imposed on Jewellery The strike by bullion traders and jewellers continued for the 8th day to protest the Budget proposal to impose one per cent excise duty(without input tax credit) on Jewellery, despite the Centre's assurance that it would look into the issue. Most Jewellery houses are closed since the finance minister Arun Jaitley in his Budget proposal on February 29 levied 1% excise duty on Jewellery. Striking associations in different part of the country h...
Dear Professional Colleague, No bar on admissibility of Cenvat credit either as Inputs or Capital goods at any stage of proceedings We are sharing with you an important judgment of the Hon’ble CESTAT, Kolkata in the case of Tata Steel Ltd. Vs. Commissioner of Central Excise, Jamshedpur [(2016) 66 taxmann.com 76 (Kolkata - CESTAT)] on following issues: Issue: Whether rails and other track materials, namely, sleepers, paints and crossings etc. used for movement of raw materials, finish...
Cenvat credit admissible on services of sales commission agent Background: Even though the definition of ‘input services’ given under Rule 2(l) of the Cenvat Credit Rules, 2004 (“the Credit Rules”) covers the services of sales promotion in its inclusive part, eligibility to avail Cenvat credit on the services rendered by a commission agent has been disputed recently because of divergent judgments and views of the Department. In this regard, the Hon’ble Punjab &...
Cenvat credit on input services availed prior to initiation of manufacturing activity is admissible Shree Cement Ltd. Vs. Commissioner of Central Excise, Jaipur [2015 (63) taxmann.com 151 (New Delhi - CESTAT)] Facts: The Department denied the Cenvat credit on the ground that Shree Cement Ltd. (“the Appellant”) is not entitled to take Cenvat credit on Service tax on cargo handling service which has been distributed to the...
Comments