CESTAT quashes Recovery of CENVAT Credit of Excise Duty Paid on Manufacture of Fork lift truck parts on ground of Non-violation of section 2(f) of Central Excise Act [Read Order]

The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the recovery of CENVAT credit of excise duty paid on the manufacture of forklift truck parts on the ground of non-violation of section 2(f) of the Central Excise Act,1944. 

Maini Precision Products Pvt Ltd, the appellant assessee engaged in the 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 were received by the appellant on which CENVAT Credit was 

availed were like finished goods and the processes carried out by the assessee which resulted in ‘manufacture’ in terms of Section 2(f) of the Central Excise Act. 

D.S. Sangeetha, the counsel for the department contended that the inputs received by the assessee are neither unfinished nor semi-finished and also, the processes like drilling, burr removal, grinding, blackening, etc. carried out on the said inputs do not result in ‘manufacture’ and the recovery raised by the revenue was as per the law and liable to be sustained. 

The Bench observed that in the case of Flex Engineering Ltd, the court held that the processes carried by the assessee in their premises resulted in manufacture, and accordingly, CENVAT Credit availed on the duty paid on inputs received was admissible to the assessee. 

The two-member bench comprising D M Misra (Judicial) and Bhagya Devi (Technical) quashed the recovery of CENVAT Credit against the assessee. 

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