Custom, Excise & Service Tax Tribunal
M/S Andhra Ferro Alloys Ltd vs Cce & Cc, Visakhapatnam-I on 26 May, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Appeal No. E/454 & 455/2007 (Arising out of Order-in-Appeal No. 24/2006 (V-I) (D) CE & 17/2006 (V-I)(D) CE dt. 22.03.2007 passed by CC, CE & ST (Appeals) Visakhapatnam-IV) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Honble Sh. Madhu Mohan Damodhar, Member(Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s Andhra Ferro Alloys Ltd ..Appellant(s) Vs. CCE & CC, Visakhapatnam-I ..Respondent(s)
Appearance Ms A.S.K. Swetha, Authorised Representative for the Appellant.
Sh K.B.K. Raju, Assistant Commissioner (AR) for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Honble Sh. Madhu Mohan Damodhar, Member(Technical) Date of Hearing: 26.05.2016 Date of Decision: 26.05.2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The issue involved in both appeals being the same, they were heard together and are disposed by this common order.
2. The appellants are manufacturing High Carbon Ferro Chrome (HCFC) falling under chapter subheading 7202.00 of Central Excise Tariff Act (CETA), 1985. They are availing CENVAT credit on inputs & capital goods. The appellants purchased low grade HCFC on payment of duty and processed the same and resultant High Grade Carbon HCFC was cleared on payment of duty treating that the process amounted to manufacture. The department was of the view that no manufacture was involved as the input consumed low grade HCFC and final product high grade HCFC both fell in the same Chapter Heading 7202. A show cause notice was issued raising the above allegations and proposing demand/recovery of CENVAT Credit of Rs. 1,40,013/- availed on HCFC used as inputs, along with interest, besides proposal to impose penalty.
3. After due process of law, the original authority, dropped the proceedings observing credit cannot be denied. The department preferred appeal and the Commissioner (Appeals) vide the impugned order, held that there is no manufacturing process involved and that materials fail to satisfy the definition of input given under Rule 2(k) of CENVAT Credit Rules (CCR), 2002 and set aside the order passed by adjudicating authority. The appellant is thus before the Tribunal.
4. On behalf of the appellant, the learned counsel, Ms A.S.K. Swetha submitted that the appellants had cleared the final product on payment of Central Excise duty. The credit availed on inputs is sought to be denied on the sole premises that the activity does not amount to manufacture. She submitted that it is settled law that once duty on the final products has been accepted that credit cannot be denied on the ground that the activity does not amount to manufacture. She placed the following judgments:
1. Exide Industries Ltd., Vs CCE & ST, Delhi-III [2016 (2) TMI 591 Cestat (New Delhi)]
2. Ajinkya Enterprises Vs Commissioner [2013 (288) ELT 247 (Tri-Mum)]
3. Ajinkya Enterprises Vs CCE, Pune [2013 (294) ELT 203 (Bom)]
4. Commissioner Vs Creative Enterprises [2009 ELT 785 (Guj)] affirmerd by Honble S.C. [2009 (243) ELT A 120 S.C].
5. CCE & ST Rohtak Vs Panch Ratna Steel (P) Ltd., [2015 (10) TMI 1252 Cestat, New Delhi]
5. The learned AR, Sri K.B.K. Raju defended the impugned order and submitted that the input as well as finished product fall under the same chapter heading 7202. Thus no new, distinct product emerges. Therefore, the process does not amount to manufacture. The appellants have erroneously paid duty and therefore are not eligible to avail credit on inputs used for activity which is not manufacture.
6. The issue whether credit is eligible on inputs, when the process does not amount to manufacture is no longer res integra.
In the case of Commissioner Vs Ajinkya Enterprises the Honble High Court of Bombay held as under:
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 Vs 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 does 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.
7. The above decision was followed by the Tribunal in Uttam Galva Steels Ltd., Vs CCE, Raigad [2016 (336) ELT 81 (Tri-Mum)] where it was held that once assessee considered the activity as amounting to manufacture and discharged duty liability CENVAT Credit cannot be denied holding that there is no manufacture. Following the dictum laid in the above judgments as well as the other decisions relied by the appellant we have no hesitation to hold that the credit is admissible. The impugned order is set aside as not sustainable. The appeal is allowed with consequential reliefs, if any.
(Operative part of this order was pronounced in court
on conclusion of the hearing)
(MADHU MOHAN DAMODHAR) (SULEKHA BEEVI C.S.)
MEMBER (TECHNICAL) MEMBER(JUDICIAL)
Jaya.
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