Contention of Revenue that Inputs should first come to factory is baseless- as final product is manufactured at site,obviously input has to go to site: CESTAT

No Comments

This is a Revenue appeal filed in the year 2009.

The issue is whether the appellant is entitled for the CENVAT credit on inputs supplied directly at the site of manufacture of excisable goods.

The AR submitted that as per CCR, CENVAT credit can be allowed only if the inputs are received in the factory of the manufacturer. In as much as since in the present case, the inputs were sent directly to the site, credit cannot be allowed.

The respondent assessee informed that the inputs on which credit was taken was supplied to the site where the goods have been manufactured and the excise duty was paid; that the value of the inputs so supplied directly has been included in the total value of the goods manufactured at site, therefore, there is no reason to deny CENVAT credit.

The Bench observed –

“…undisputedly the goods were finally manufactured at site and respondent, by considering the manufacture at site, discharged the excise duty. The inputs on which CENVAT credit was availed, was supplied at the site has been admittedly used in the manufacture of such final product and excise duty was paid. In these factual positions, the compliance of CENVAT Credit Rules have been scrupulously made. The contention of the Revenue that the goods first should come to the factory is baseless for the reason that there is no purpose of bringing the inputs in the factory for the reason that the final product is manufactured at site, obviously the input has to go to the site and be used in the manufacture of final products. Therefore, we do not see any reason for denying the CENVAT credit.”

Holding that there is no infirmity in the impugned order, the same was upheld and the Revenue appeal was dismissed.

Citation: 2018-TIOL-1384-CESTAT-MUM