Alpha Toyo Ltd vs C.C.E. Delhi-Iv

[Arising out of OIA No. 279-CE-DLH-IV-APP-2014 dated 16/10/2014 Passed by the Commissioner (Appeals) Central Excise, Delhi-IV]

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

4. Whether order is to be circulated to the Department Authorities?

Alpha Toyo Ltd. Appellant

Vs.

C.C.E. Delhi-IV Respondent

Appearance:

Present for the Appellant: None, Shri N.L. Jangir

Present for the Respondent: Shri R.K. Mishra, AR

Coram: Honble Ms. Sulekha Beevi C.S., Member (Judicial)

Final Order No.53227/2015

Per: Sulekha Beevi C.S.

The issue involves the disallowance of Cenvat credit on bright bars.

2. This case came up for hearing today as per the published list and as the issue is covered by several judgments of the Tribunal, the case was taken up for disposal.

3. It was observed that the appellant had wrongly availed Cenvat credit on Steel Wires/Bright Bars, as the Honble Supreme Court in the case of M/s Vee Kayan Industries reported in 1996 (83) E.L.T. 262 (SC) held that no process of manufacture was involved during the transformation of Bright Bars from the round bars; as such Bright Bars not being an excisable commodity the credit was not admissible on Bright Bars. Accordingly, the appellants were issued show cause notice which after adjudication disallowed credit and also raised duty demand, interest and penalty. In appeal, the Commissioner (Appeals), upheld the same. Aggrieved, the appellant is before the Tribunal.

4. The credit on Bright bars used by the appellant for the manufacture of finished goods, is sought to be denied on the ground that Bright bars are not a commodity subject to excise duty as no process of manufacture is involved in the transformation of round bars into Bright bars. The short question involved is whether the appellants are entitled to credit on the duty paid on Bright bars used as inputs. According to Department the manufacturer who supplied the bright bars was not liable to pay duty on these items as no process of manufacture was involved and therefore the appellant cannot avail credit on these items. The payment of duty on bright bars by the appellant is not disputed. So also there is no dispute that bright bars were used as inputs by the appellant to manufacture their final product. Again there is no case that the inputs supplied were not covered by valid document prescribed under the Cenvat Credit Rules, for availing credit. The benefit of credit is sought to be denied on the ground that on the end of the supplier these goods were not excisable goods.

5. In CCE, Hyderabad vs. Deepthi Formulations Ltd 2012 (286) ELT 396 (TRI- Bang) the Tribunal has taken the view that when the input is received in the factory and used in or in relation to manufacture of final product and payment of duty is evidenced by the invoices the credit cannot be denied. The question whether the input is a result of a process of manufacture is irrelevant. What is relevant is whether duty has been paid or not on such input.

6. The Tribunal vide Final Order No. 52908/2015 dated 17.9.2015 has held the issue in favour of the assessee.

In view thereof the impugned order is set aside and the appeal is allowed.

(Pronounced in the open Court)

(Sulekha Beevi C.S.)

Member (Judicial)

K. Gupta

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