Jayaswal NECO Industries Limited Vs Principal Commissioner (CESTAT Delhi)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, considered two appeals arising from an order dated 29.03.2023 passed by the Principal Commissioner. The assessee challenged the disallowance of CENVAT credit amounting to Rs. 53,94,564, while the department challenged the portion of the order dropping a demand of Rs. 67,50,989. The Tribunal ultimately allowed the assessee’s appeal and dismissed the department’s appeal.
The assessee was engaged in the manufacture of dutiable goods including sponge iron, pig iron, and billets. It had availed CENVAT credit on various input services reflected in its statutory returns. Multiple audits were conducted covering different periods, including audits by the Internal Audit Party, the Comptroller and Auditor General (CAG), and a special audit. During the audit proceedings, the assessee reversed CENVAT credit amounting to Rs. 33,44,889 along with interest of Rs. 14,06,799.
Subsequently, a show cause notice dated 23.02.2016 proposed recovery of CENVAT credit amounting to Rs. 2,49,40,473 along with interest and penalty on grounds including availment of credit on allegedly ineligible input services, services not received within the factory premises, and reliance on invalid documents. The Principal Commissioner later allowed credit of Rs. 1,95,45,909 but disallowed Rs. 53,94,564.
