Order Date: 23 August 2022

Facts-

• The Appellant, Indian Oil Corporation Limited, Refinery Division is engaged in the manufacture and sale of petroleum products. The petroleum products are manufactured in the refineries of the Appellant situated in various parts of the country.
• During the period from April 2013 to June 2017, Appellant used Crumb Rubber Modifier (CRM) for mixing with Bitumen to produce Crumb Rubber modified Bitumen (CRMB) which was cleared upon payment of duty from Haldia refinery.
• The dispute is regarding availment of Cenvat Credit on the CRM and Handling service used within the Refinery for manufacturing CRMB inasmuch as the said process did not amount to manufacture of excisable goods as per section 2(f) of the Act.
• Vide the adjudication order Cenvat Credit was disallowed and determined as payable by the assessee along with interest and penalty was also imposed. 
• The Appellant submitted that duty paid on the Crumb Rubber Modifier Bitumen cleared from Haldia Refinery premises was all along much more than the Cenvat Credit availed. The additional amount of duty was paid from Personal Ledger Account (PLA) and no refund has been claimed on the excess amount paid.
• The Appellant further submitted that as Handling Services was used before the place of removal, there is no occasion for disallowance of Cenvat Credit on Input Services. 
• Hence, the present appeal is filed before the Tribunal.

Issue-

• Whether assessee has availed Cenvat Credit correctly when the activity undertaken by them on the inputs according to Revenue does not amount to manufacture?

Order-

• The Tribunal observed that the Hon’ble Karnataka High Court in the case of CCE Bangalore-V v. Vishal Precision Steel Tubes & Strips Pvt.Ltd. relying on the decision of Hon’ble High Courts of Bombay and Gujarat held that when the Cenvat credit availed on the inputs stand utilized for payment of duty on the final product, there would be no requirement of reversal of the said credit even if the activity undertaken by the assessee does not amount to manufacture.
• The Tribunal relied In the decision of Hon’ble Bombay High Court in the case of Commissioner of Central Excise, Pune-III v. Ajinkya Enterprises [2013 (294) E.L.T. 203 (Bom.)], and In another judgment of the Hon’ble Gujarat High Court in the case of Commissioner of Central Excise & Customs, Surat-III v. Creative Enterprises - 2009 (235) E.L.T. 785 (Guj.) and held that it is an undisputed position that the final product is treated as dutiable and duty is paid by the assessee. When once duty is paid by the assessee treating the activity as manufacturing activity by the Department, Cenvat credit is available and there is no question of denial of Cenvat credit.
• The impugned order is set aside and the Appeal filed by the Appellant is allowed.