By TIOL News Service

MUMBAI, MAR 10, 2015 : THIS is a Revenue appeal.

The CESTAT order - 2014-TIOL-373-CESTAT-MUM allowing the appeal of the assesse was reported thus -

CE - s. 2(f) of CEA, 1944 - Plastic films, polyester films, BOPP films are subjected to printing using rotogravure cylinders - Later, these printed materials are laminated by binding of two or more layers of same or different substrates with help of bonding agent and the laminates so obtained are then taken for slitting process to get proper size in form of coils - such laminates are cleared to customers as packaging materials - process amounts to manufacture and, therefore, duty has been correctly discharged by availing CENVAT credit - no cause for seeking reversal of CENVAT credit availed on inputs by treating the process as not amounting to manufacture or treating the amount of duty collected from customers as deposit and seeking recovery u/s 11D of CEA, 1944 - Appeal allowed with consequential relief: CESTAT

Disallowing the CENVAT credit availed on the inputs on the plea that the final product has not emerged from the process which could be termed as “manufacture” cannot be sustained as it is against the tenets of equity and justice - department having accepted the excise duty on the final product now cannot be permitted to deny CENVAT credit on the inputs on such a technical plea - If such an argument is allowed to sustain it would negate the entire object of the CENVAT credit scheme which has been put in place with a view to protect the assessee from double taxation: CESTAT

The love of litigation brought the CCE, Mumbai-III to the High Court.

The High Court, after narrating the facts of the case as summarized by the CESTAT, observed -

++ We have found that the Tribunal's findings are consistent with the factual material placed and the undisputed process or activity undertaken by the unit of the Assessee. Such findings of fact can never be termed as perverse or vitiated by error of law apparent on the face of the record.

++ In the facts and circumstances peculiar to the Assessee, it was held by the Tribunal that the matter does not fall within the tests which are laid down by the Hon'ble Supreme Court in the case of Metlex (I) Pvt. Ltd. - 2004-TIOL-77-SC-CX. That Judgment is clearly distinguishable. Once such is the exercise undertaken by the Tribunal, then, no substantial question of law arises for our determination and consideration in this Appeal. The Appeal is devoid of merits.

++ We are surprised that such an Appeal has been brought by the Revenue. For, once it is the Assessee who admits that what he is doing is manufacture of goods and products which are sold and marketable and known to the market as such. In the circumstances a clear rethink is necessary when blindly some ratio of a Judgment of the Hon'ble Supreme Court and dehors the factual position is relied upon to file frivolous Appeals .

The Revenue Appeal was dismissed.

(See 2015-TIOL-566-HC-MUM-CX)