CENVAT CAN BE CLAIMED WHEN DISPUTE IS ON EXIGIBILITY OF EXCISE: COURT

In Commissioner of Customs & Central Excise, Hyderabad vs. Goldstone Tele services Ltd, the Andhra Pradesh High Court found that the excise authorities had asked the respondent to pay excise duty on cable joining kits on the ground that the process amounted to manufacture. The respondent complied. But since the respondent was paying excise, he also started claiming CENVAT credit on the inputs used in cable joining kits. On appeal, his stand that what he was doing was merely assembly not amounting to manufacture, was upheld. Thereupon, he claimed refund of excise duty paid, which was rejected by the department on the ground that he was availing of CENVAT credit. The High Court ordered refund on the ground that payment of excise on finished goods that were not eligible to excise was under fiat and not on own volition. Therefore, the excise duty paid on finished goods net of CENVAT credit during the pend ency of dispute had to be refunded.