CENVAT Credit Cannot Be Denied When Duty is accepted by Department for Manufactured

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that CENVAT credit cannot be denied when the duty is accepted by the department for manufactured products. The case involved Mangal Singh Bros. Pvt. Ltd., which processed transmission and conveyor belts by cutting them to size, inspecting for defects, and rebranding. The department argued that these activities did not constitute manufacturing, thus denying CENVAT credit. However, the tribunal noted that the appellant had paid higher excise duty than the disputed credit amount and referenced the Bombay High Court ruling in Ajinkya Enterprise, which states that if excise duty on final products is accepted, CENVAT credit should not be denied. Consequently, the tribunal ordered the department to refund the reversed credit with interest within two months.