CENVAT Credit of Excise Duty Allowance on Input Goods follows various processes Blackening, Buffing, Final Inspection as processes Amounting to Manufacture :CESTAT [Read Order]

The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT Credit of Excise Duty is allowable on the input goods which followed the various processes like blackening, buffing, final inspection as processes amounting to manufacture. 

Maini Precision Products Pvt Ltd, the appellant assessee engaged in manufacturing of Forklift truck parts, components for machinery, and automobile parts and availed CENVAT Credit of Rs. 2,40,75,746/- on the goods received in their factory and subjected to various processes like blackening, buffing, final inspection, packing, etc. which were subsequently exported on the Letter of undertaking. 

The assessee appealed against the order passed by the Commissioner (Appeals) to confirm the demand and for the imposition of penalty against the assessee. 

Rajesh Chander Kumar and Yovini Rajesh Rohra, the counsels for the assessee contended that the goods received by the assessee were not in marketable condition but only after subjecting the same to various processes like blackening, buffing, final inspection, packing, etc. as per the requirement of customers, it became marketable even though the impugned goods do not lose their original nomenclature, identity and essential characters. 

D.S. Sangeetha, the counsel for the department relied on the decisions made by the lower authorities and contended that the goods received by the assessee on which CENVAT Credit was availed were like finished goods and the processes carried out by the assessee do not result in ‘manufacture’. 

The Bench observed that in the case of Hindustan Zinc Ltd. v. Commissioner of Central Excise, the court held that the processes carried by the assessee in their premises result into manufacture and accordingly, CENVAT Credit availed on the duty paid on inputs received was admissible. 

The two-member bench comprising D M Misra (Judicial) and Bhagya Devi (Technical) held that various processes blackening, buffing, final inspection, packing, etc. carried out on the inputs be considered as processes amounting to manufacture. 

To Read the full text of the Order CLICK HERE

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