Full Judgment
2. In the grounds of appeal, the Collector has mentioned that the respondents received semi-finished goods for subjecting them to the processes of machining, trimming, welding, painting and therefore no new product having a distinct identity emerged and hence Collector (Appeals) order was not correct.
3. Learned Advocate for the appellants drew attention to the Collector (Appeals) Order in which he has indicated how these processes amount to manufacture and submitted that credit was rightly admissible to them particularly when the final goods were cleared on payment of duty.
4. Learned DR reiterated the Department's arguments but admitted that the final goods after these operations were removed on payment of duty.
5. Considered. Modvat credit has been denied on the ground that operations carried on in the factory on such semi-finished goods do not amount to manufacture. In the grounds of appeal Collector himself admits that the goods were received in semi-finished condition. Reply to the show cause notice at page-10 of the paper book indicates final product in which the inputs in question were utilised and were cleared from the factory on payment of duty of Rs. 60,164.88 as BED and Rs. 3008.24 as SED and that they paid duty of Rs. 63,172.12 against the Modvat credit of Rs. 41,434.32.
6. If the processes carried on do not amount to manufacture then obviously no duty was required to be paid on the finished products after subjecting them to various operations. The very fact that such duty was collected by the Department indicates that the processes carried out amount to manufacture. In view of this there is no infirmity in the findings of the Collector (Appeals) and he has rightly allowed Modvat credit.
7. In view of this Revenue appeals are rejected and the impugned order upheld.