Mega Offer Avail 65% Off in CA IPCC and 50% Off in all CA CS CMA subjects.Coupon- IPCEXAM65 & EXAM50. Call: 088803-20003

CA Final Online Classes
CA Classes

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

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

LinkedIn


Court :
CESTAT, Mumbai

Brief :
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.)]

Citation :
Foam Techniques MFG (I) Pvt. Ltd. Vs. CCE, THANE-I [2015-TIOL-156-CESTAT-MUM]

 Dear Professional Colleague,

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
Email: bimaljain@hotmail.com
Web: www.a2ztaxcorp.com

Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.

Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission. 

 

Bimal Jain
on 30 January 2015
Published in Excise
Views : 2037
Report Abuse

LinkedIn







Trending Tags