2025-VIL-1702-CESTAT-CHD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Sections 2(f), 11A and 35 of Central Excise Act, 1944 – Manufacture of plastic laminates – Entitlement of benefit of notification – Appellants are engaged in manufacture of Plastic Laminates and was availing benefit of Notification No.56/2002-CE – Department issued show cause notices seeking to deny refund by way of self-credit and seeking to deny CENVAT credit availed by Appellants – Commissioner confirmed duty demand and denied CENVAT credit – Whether processes undertaken by Appellants to make Plastic Laminates amounts to manufacture or not – HELD – Section 2(f) of the Act provides that manufacture includes any process incidental or ancillary to completion of a manufactured product. Appellants are transforming laminated/metallised plastic sheets into packing material. Processes involved in impugned cases are not that of mere lamination. Two or more layers are glued together and left in a hot room, so that they bond together better. End product does not remain a mere laminated film. Distinct new product emerges as a result of processes undertaken by Appellants. Processes undertaken by Appellants in converting laminated/metallised laminates into packaging material amounts to manufacture. As processes undertaken by Appellants amounts to manufacture, there is no infirmity in availment of benefit of Notification No.56/2002 by Appellants – Appeals allowed - Recovery of self-credit – Whether Revenue could have issued show cause notices to recover allegedly wrongly availed self-credit in terms of Notification No.56/2002-CE without a challenge to assessment orders – HELD – Appellants have taken self-credit and submitted to department on a month to month basis. For entire impugned period, refund availed by Appellants remains unchallenged. Though erroneously refunded amounts can be recovered in terms of Section 11A of the Act, no authority has held that refunds availed are erroneous. It is not open to department to proceed with recovery of so called erroneous refund, unless order of assessment or self-assessment as the case may be is appealed against under provisions of Section 35 of the Act - Eligibility to take credit – Whether Appellants are eligible to take CENVAT Credit – HELD – Appellants were paying duty and were filing statutory monthly returns. No objection was ever taken by department at any stage. Once department collected central excise duty, subsequently they cannot turn around and contend or that Appellants were not entitled to avail/utilise CENVAT credit. It is held in a number of cases that when final product is cleared on payment of duty, CENVAT credit would be available, if otherwise eligible. Impugned order seeks to deny CENVAT Credit for reason that processes undertaken by Appellants do not amount to manufacture. Processes undertaken by Appellants in converting laminated/metallised laminates into packaging material amounts to manufacture. Department has not alleged any other reasons for denial of credit. Appellants are eligible to avail CENVAT Credit and denial of same is not sustainable. Orders under challenge are set aside.
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