ASHOK ENTERPRISES Vs. CCE

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, we are of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with pre deposit, we take up the appeal.

(2.) THE appellants are engaged in the activity of cutting and slitting of BOPP film in jumbo rolls into specific sizes. During the period of dispute (January to December 2006), they paid duty on their product by utilizing CENVAT credit of the duty paid on inputs amounting to Rs. 55,87,162/ -. The department found that the process of cutting/slitting of aluminium foil, tissue paper etc. was held not amounting to "manufacture" for the purpose of Section 2(f) of the Central Excise Act, by the apex court in the case of CCE New Delhi v. S.R. Tissues Pvt. Ltd. and , therefore, the appellants' product was not excisable and the availment of CENVAT credit was uncalled for. On this basis, a show -cause notice was issued, in adjudication of which, the Commissioner passed the impugned order confirming the demand of Rs. 55,87,162/ - equivalent to the CENVAT credit found to have been erroneously taken by the assessee during the aforesaid period. The present appeal is against the Commissioner's decision.

(3.) AFTER considering the submissions of both sides, we find that the issue arising in this case is already covered in favour of the appellants by a recent decision of this Bench vide Final Order No. 938/07 dt. 30.7.07 in appeal No. E/446/07 [Super Forgings and Steels Ltd. v. CCE Chennai]. In that case, the question was whether the input -duty credit availed by the assessee for payment of duty on 'bright bars' (final product) was admissible to them. The Revenue had contended, in view of the Supreme Court's judgment in Vee Kayan Industries v. CCE Chandigarh 1996 (183) ELT 262 (SC), wherein conversion of 'black bars' (input) into 'bright bars' was held to be not amounting to "manufacture", that the assessee was not entitled to take CENVAT credit on 'black bars' inasmuch as, 'bright bars' were not excisable. The assessee took the stand that the credit was not liable to be denied as duty was actually paid on 'bright bars'. Assessee's contention was upheld in view of the Tribunal's decision in Syndet India v. CCE Navi Mumbai , wherein it was held that even if duty was not payable on the finished goods (there being no manufacture), there was no question of recovery of any credit having been utilized towards payment of such duty. In our final order dated 30.7.07 ibid, we also observed that the decision rendered as early as on 9.12.2003 by the Tribunal in Syndet India case had been accepted by the Revenue and, therefore, it was not open to them to deny the CENVAT credit. The view taken by us in the case of Super Forgings and Steels Ltd. (supra) is squarely in support of the appellants' case.