Custom, Excise & Service Tax Tribunal
Argus Coatings &Amp; Polymers Pvt. Ltd. vs Cce Thane I on 17 July, 2018
1
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO. I
Appeal No. E/2012/10
(Arising out of Order-in-Original No. 44/BR-44/Th-I/2010 dated
27.9.2010 passed by the Commissioner of Central Excise, Thane-
I).
M/s Argus Coatings & Polymers Pvt. Ltd. Appellant
Vs.
Commissioner of Central Excise, Thane-I Respondent
Appearance:
Shri G.B. Yadav, Advocate for Appellant Shri N.N. Prabhudesai, Supdt. (AR) for Respondent CORAM: HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL)
HON'BLE MR. S. SRIVASTAVA, MEMBER (TECHNICAL) Date of Hearing: 17.07.2018 Date of Decision: 17.07.2018 ORDER NO. A/86986 / 2018 Per: Dr. D.M. Misra This is an appeal filed against Order-in-Original No. 44/BR-44/Th-I/2010 dated 27.9.2010 passed by the Commissioner of Central Excise, Thane-I.
2. Briefly stated facts of the case are that the appellants are engaged in the manufacture of waterproofing chemicals and other chemicals falling under Chapter 27, 28, 32, 39 & 40 of the 2 Central Excise Tariff Act, 1985. Considering the activity of re- packing and re-labeling as manufacture, the appellant discharged appropriate duty on the re-packed/re-labeled goods after availing CENVAT Credit on the inputs. Alleging that the said activity does not amount to manufacture, a show-cause notice was issued proposing denial of CENVAT Credit of Rs.2,17,77,276/- on the inputs which were utilized in manufacture of finished goods during the period August, 2005 to March, 2009. On adjudication, the demand was confirmed with interest and penalty. Hence, the present appeal.
3. Learned Advocate for the appellant submits that considering the process of packing, repacking, labeling and re- labeling of the 'input' chemicals as manufacture, the appellant discharged appropriate excise duty on the said goods, which have never been disputed by the Revenue. Therefore, denial of CENVAT Credit on the inputs that had been repacked and relabeled alleging such activities do not result into manufacture, is contrary to the principles of law laid down by the Hon'ble Bombay High Court in the case of Commissioner of Central Excise, Pune-III Vs. Ajinkya Enterprises - 2013 (294) ELT 203 (Bom).
4. Learned AR for the Revenue reiterates the findings of the learned Commissioner (Appeals).
5. Heard both sides and perused the records. 3
6. We find that undisputedly the appellant had discharged appropriate Central Excise duty after undertaking the process of repacking, relabeling of the inputs on which credit has been availed by them. Thus, it is incorrect to allege that the appellants are not eligible to avail CENVAT Credit on inputs that has been utilized in the manufacture (repacking, relabeling etc.) of waterproofing resultant product, on which appropriate excise duty was paid and accepted by the Revenue. We find that the issue is no more res integra and covered by the judgment of Hon'ble Bombay High Court in the case of Ajinkya Enterprises (supra), wherein their Lordships have observed as under: -
"9. It is relevant to note that the Board in its Circular dated 7th September, 2001 had only held that the activity of cutting/slitting of HR/CR coils into sheets or strips constitutes manufacture. Admittedly, the assessee had carried on additional activities such as pickling and oiling on the decoiled HR/CR coils, which is a complex technical process involving huge investment in plant and machinery. Since these additional activities were not considered by the Board in its Circular dated 7th September, 2001, the withdrawal of the said Circular cannot be a ground to hold that the activity carried on by the assessee did not constitute manufacturing activity. It is only on 24th June, 2010, the Board has issued a Circular to the effect that the process of pickling does not amount to manufacture. Therefore, during the relevant period, that is, during the period from 2nd March, 2005 to 31st December, 2005, it could not be said that the issue was settled and that the assessee paid duty on decoiled HR/CR coils knowing fully well that the same were not manufactured goods. If duty on decoiled HR/CR coils was paid bona fide, then availing credit of duty paid on HR/CR coils cannot be faulted.
10. Apart from the above, in the present case, the assessment on decoiled HR/CR coils cleared from the factory of the assessee on payment of duty has neither been reversed nor it is held that the assessee is entitled to refund of duty paid at the time of clearing the decoiled HR/CR coils. In these circumstances, the CESTAT following its decision in the case of Ashok Enterprises - 2008 (221) E.L.T. 586 (T), Super Forgings - 2007 (217) E.L.T. 559 (T), S.A.I.L. - 2007 (220) E.L.T. 520 (T) = 2009 (15) S.T.R. 640 (Tribunal), M.P. Telelinks Limited - 2004 (178) E.L.T. 167 (T) and a decision of the Gujarat High Court in the case of CCE v. Creative Enterprises reported in 2009 (235) E.L.T. 785 (Guj.) has held 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. Admittedly, similar view taken by the Gujarat High Court in the case of Creative Enterprises has been upheld by the Apex Court [see 2009 (243) E.L.T. A121] by dismissing the SLP filed by the Revenue."4
7. Following the principles of law laid down in the aforesaid case, we do not find merit in the impugned order. Accordingly, the same is set aside and the appeal is allowed.
(Operative portion of the order pronounced in Court) (S. Srivastava) (Dr. D.M. Misra) Member (Technical) Member (Judicial) Sinha