Mangal Singh Bros. Pvt. Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
Post 2003 amendment; activity of cutting, labelling, re-labelling etc. under certain chapters would amount to “manufacture” without going into the question of manufacture; once duty on the final product has been accepted; cenvat credit cannot be denied
We share the recent order passed by the Hon’ble CESTAT, Mumbai. The appellant is selling V belts. It was selling the said goods after cutting, packing/repacking and labelling. It paid central excise duty on the said final product and availed cenvat credit. The central excise department, after an audit, alleged that the activity undertaken by the appellant does not amount to “manufacture” under section 2(f) of the Central Excise Act. Hence, sought to recover the cenvat credit availed by the appellant on the ground that there is no “input” in terms of Rule 2(k) of the Cenvat Credit Rules, 2004. Demands along with interest and penalties were confirmed. appeal was rejected. Hence, appeal before the Hon’ble Tribunal.
The Hon’ble CESTAT, Mumbai set aside the demand and allowed the appeal with direction for refund, along with interest. It held: (i) post 2003 amendment; activity of cutting, labelling, re-labelling etc. under certain chapters would amount to “manufacture”; (ii) without going into the question of manufacture; once duty on the final product has been accepted; cenvat credit cannot be denied; (iii) follows Hon’ble Bombay High Court in Ajinkya Enterprises case and the Hon’ble Gujarat High Court judgment in Creative Enterprises case.
