Duty paid on Input received used for manufacturing final product is entitled to CENVAT Credit: CESTAT [Read Order]

The Kolkata of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) ruled that duty paid on input received used for manufacturing final product is entitled to CENVAT Credit.

Shri S.P. Siddhanta appeared for the appellant and Shri K. Chowdhury appeared for the respondent.

The appeal was to find out whether the appellant,M/s. Kalimata Vyapaar Private Limited was entitled to take Cenvat Credit of Rs.1,13,941/- on the inputs purchased from M/s Himadri Chemicals & Industries Limited (HCIL),during the period from December 2007 to June 2008. The Department stated that M/s HICL is not the manufacturer as per the definition of manufacture as defined in Section 2 (f) of the Central Excise Act, 1944 and a show-cause notice in this regard was issued to M/s HCIL for recovery of the Cenvat Credit availed on inputs Furnace Oil.

It was alleged that the processes carried out by M/s HCIL, were simply blending/mixing of Heavy Creosote Oil with Furnace Oil and selling the blended final product in the name of “Fuel Oil”.  As per Section 2 (f) of the Central Excise Act, 1944, the process of blending/mixing does not amount to manufacturing and also alleged that the payment made by M/s HCIL was not Central Excise duty, but was a deposit made to Government Account.

Shri P K Choudhary, member(judicial) observed that the Appellant satisfied the essential requirements for CENVAT credit as the supplier of the input paid duty and issued a valid invoice to the Appellant.The Appellant’s factory received the input which was used to manufacture their final product and its duty-paid character was evidenced by the invoices.

The Tribunal set aside the impugned order and allowed the appeal filed by the Appellant.

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