Supreme Court: Army Must Prove Disability Was Unrelated to Service to Deny Pension  ||  SC: Grant of Fishing Rights by Deed is a Transfer of Immovable Property, Qualifies as Lease  ||  Gujarat HC: Waqf Board Inquiry into Religious Character Not Barred by Places of Worship Act  ||  Gauhati HC Rejects Failed Candidates’ Challenge to Law Officers’ Appointment Procedures  ||  Kerala HC Grants Pre-Arrest Bail to Woman Accused of Throwing Newborn, Cites Lack of Intent  ||  P&H HC Quashes Case, Holds 'Heart Lung Pack' was not a Notified Drug in 2010  ||  Kerala HC: Illegal Arrest Entitles Accused to Release, Not Bail  ||  Allahabad HC Explains: Does Conversion Automatically Strip a Person of Scheduled Tribe Status?  ||  Delhi HC Rejects Vimal Elaichi Plea against FDA Notice to Shah Rukh Khan, Ajay Devgn, Tiger Shroff  ||  Calcutta HC Upholds Jail Term for Owner Over Unauthorised Construction under Roof-Repair Permit    

Vishal Presicsion Steel Tubes & Strips Pvt. Ltd. Vs. The Commissioner of Central Excise - (Customs, Excise and Service Tax Appellate Tribunal) (14 Dec 2023)

Once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed, even if, the activity not amount to manufacture

MANU/CB/0120/2023

Excise

In facts of present case, the Appellant is engaged in the manufacture of excisable goods viz. Electric Resistance Welded (ERW) Steel Tubes. They availed cenvat credit on the inputs imported and used in the manufacture of finished goods as well as cleared the inputs 'as such' on payment of appropriate duty.

Alleging that the appellant had availed irregular cenvat credit on the imported goods and cleared as such as the said tools neither inputs nor capital goods used in or in relation to the manufacture of their final products, hence show-cause notices were issued to them demanding duty of Rs.75,32,305 and Rs.18,49,511 respectively, with interest and also proposing penalties under Rule 15(1) of Cenvat Credit Rules, 2004. On adjudication, demands were confirmed with interest by the Commissioner, who in turn, rejected their appeal. Hence, the present appeal.

In the present case, the appellants are engaged in the manufacture of various high precision tools, and also import certain parts used as inputs. The tools were customised and sold by the appellant on payment of appropriate duty of excise on its transaction value, which was more than the credit availed on the inputs. The Revenue disputed the processes undertaken on the imported items alleging the same do not result into manufacture of a new item different from the inputs; hence the activity undertaken by the appellant is purely in the nature of trading; therefore, cenvat credit availed on the inputs cannot be admissible.

The issue is no more res integra as it has already been settled by various decisions. Bombay High Court in the case of CCE Vs. Ajinkya Enterprises observed that, once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity docs not amount to manufacture. In view of the settled principle of law, there is no merit in the impugned order. Consequently, the impugned order is set aside. Appeal allowed.

Tags : DEMAND   CONFIRMATION   LEGALITY  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved