Custom, Excise & Service Tax Tribunal
Date Of Hearing/ Decision: 27.11.2017 vs Cce, Ghaziabad on 27 November, 2017
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
REGIONAL BENCH : ALLAHABAD
DATE OF HEARING/ DECISION: 27.11.2017
Ex. Appeal Nos. 1448/2009 & 864 of 2010
(Arising out of order-in-appeal No. 01-CE/GZB/2010 dated 19.01.2010 passed by the Commissioner of Central Excise (Appeals), Ghaziabad)
M/s Progressive Tools & Components
Private Limited Appellant(s)
VERSUS
CCE, Ghaziabad Respondent(s)
APPEARANCE None for the Appellant (s) Shri Pradeep Kumar Dubey, Supdt. (D.R.) for the Department CORAM:
Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. Anil G. Shakkarwar (Technical) Final Order Nos.71742-71743/2017 Per Ms. Archana Wadhwa :
On matters being called, neither anybody appeared nor there is any adjournment request. Accordingly, we have heard Sh. P. K. Dubey, ld. DR for the department and have gone through the impugned order. In as much, in both the appeals the issue is identical, we proceed to decide both the appeals by a common order.
2. As per facts on record, the appellants are engaged in the manufacture of automobile parts and components. Some of the parts and components are being imported by them from Japan and after undertaking certain activities at their premises, their final product, after availment of credit of duty paid on imported goods, are being cleared by them on payment of duty. For the sake of ready reference, the activity being undertaken by the appellant are detailed below:
4.4 The activities like opening the large box/ checking/ inspection of each item / Marking of MT & AT/ Retapping/ Gauging/ Dusting/ Cleaning / Quality inspection/ touch up paining does not fall under the category of manufacture as per definition contained in Section 2(f) (i) or 2(f) (ii) of the Central Excise Act, 1944 since the goods imported by them are not transforming into a new product due to performing such type of activities. Further, the said activities also does not fall under the ambit of Section 2(f) (iii) ibid as no such type of activities have been incorporated in the said Section 2(f) (iii).
4.5 Now, the parts defence that they packed the goods after doing the activities as mentioned above as per Honda Packing Standard. The provisions of Section 2(f) (iii) are clear that packing or repacking goods specified in Third Schedule in a unit container to render the product marketable to the consumer before such packing or repacking, will be termed as manufacture and it is not applicable to the goods which are already marketable and packed in unit container. The imported goods were marketable at the time of purchasing by the party. Mere repacking of the same goods does not effect its marketability.
3. Revenue entertained a view that the above activity does not amount to manufacture and as such the appellant was not entitled to avail the cenvat credit of duty paid on the inputs. On the other hand, it is the contention of the appellant that admittedly the activity of packing and repacking of goods amounts to manufacture and they were undertaking the said activity as per the requirement of their customer.
4. The authorities below did not agree with the above contention of the appellant and by their impugned order confirmed the demand by denying the cenvat credit availed in respect of inputs and also imposed penalties. Hence, the present appeals.
5. We find that without adverting to the fact as to whether the activities undertaken by the appellant amount to manufacture or not, it stands well settled that even if the activity undertaken by an assessee does not amount to manufacture of the final products which stands cleared on payment of duty, the benefit of cenvat credit cannot be disallowed. Reference is made to the majority decision in the case of Asian Colour Coated Ispat vs. CCE, Delhi-III -2015 (317) ELT 538 (Tri.). Inasmuch as the final product stands cleared by the appellant on payment of duty, we are of the view that the credit cannot be disallowed to the appellant. Accordingly, no merits are found in the Revenues stand. The impugned orders are set aside and both the appeals are allowed with consequential relief to the appellants.
(Dictated and pronounced in the open Court)
(Anil G. Shakkarwar) (Archana Wadhwa)
Member (Technical) Member (Judicial)
Pant
1
Ex. Appeal Nos. 1448/2009 & 864 of 2010