Akshar Precision Tubes Pvt. Ltd. & Anr. Vs Commissioner of CGST And CE Vadodara II (Gujarat High Court)
Gujarat High Court imposed a token cost of Rs. 1,000 on department for disregarding the directions by Central Excise and Service Tax Appellate Tribunal [CESTAT] and matter remanded for fresh de novo order.
Facts- The petitioner is engaged in manufacturing of Head Exchanger and is also undertaking job work for various principal manufacturers who are duly registered under the Central Excise Act, 1944.
Notably, the principal manufacturers supply only pipes M.S., S.S., or alloy pipes on which the petitioners undertake the process of finning/studding using certain own inputs and clears the same to the principal manufacturer on payment of Central Excise Duty under the cover of excisable invoice. The petitioners therefore, were not considering the value of free supply of pipes received by it as intermediate goods which the principal manufacturer further uses to manufacture final excisable goods at their factory which was cleared on payment of excise duty on the total assessable value of the goods. The principal manufacturers used to send the pipes on the cover of excise challan issued under Rule 4(5)(a) of the Cenvat Credit Rules, 2004.
The petitioners never availed the excise duty charged from the free issue material in form of Cenvat Credit. The petitioners availed the Cenvat Credit of excise duty charged on the own inputs used during the job work activity only which was included in the value for discharge of excise duty at the time of removal of the processed intermediate goods back to the principal manufacturers.
