COMMISSIONER OF CENTRAL EXCISE Vs. HAPPY FORGING LTD.

JUDGEMENT

(1.) THIS appeal has been preferred by the revenue under Section 35G of the Central Excise Act, 1944 (for short, "the Act") against the order of the Customs, Excise & Service Tax Appellate Tribunal, New Delhi dated 21.1.2010 proposing to raise following substantial questions of law:

(2.) THE Assessee availed Cenvat Credit as per Cenvat Credit Rules, 2004 (for short, "the Rules") in respect of inputs in manufacture on job work basis. The department raised an objection that the Cenvat Credit was not permissible on inputs used in the manufacture of exempted goods in view of Rule 6(1) of the Rules. Accordingly, proceedings were initiated under Section 11A of the Act. Stand of the Assessee was that under notification No. 214/86 -CE dated 25.03.86, exemption was available subject to the condition that supplier of raw material will either use the goods in manufacture of final product or clear the goods on payment of appropriate excise duty. Reliance was, inter -alia, placed on a larger Bench judgment of the Tribunal in Sterlite Industries Ltd. v. CCE, Pune, 2005(68) RLT 25 and judgment of the Hon'ble Supreme Court in Escorts v. CCE : 2004 (171) ELT 145 : (2004) 7 SCC 214 and also decision of Commissioner (Appeals) in another case. The adjudicating authority upheld the objections of the Assessee with the following observations:

(3.) WE have heard learned Counsel for the Appellant.