Kaushal Ferro (P) Ltd. Vs Commissioner of CGST (CESTAT Kolkata)
Material Facts
The appellant, a manufacturer of sponge iron falling under Chapter 72 of the Central Excise Tariff, availed CENVAT credit on iron and steel items such as angles, channels, beams, joists, plates and bars under Chapter 72, along with welding electrodes, which were used in the manufacture of capital goods within its factory. A show cause notice dated 27.10.2006 proposed denial of CENVAT credit availed during October 2005 to August 2006.
The appellant submitted a Chartered Engineer-certified utilisation statement and relied upon a physical verification conducted by the jurisdictional Range Superintendent on 31.07.2013. The verification found that, except for certain identified items, the fabricated goods were specified capital goods.
The adjudicating authority disallowed CENVAT credit of Rs.9,95,316 on iron and steel items and Rs.33,510 on welding electrodes, aggregating to Rs.10,28,826, treating the inputs as used for fabrication of support structures, imposed a penalty of Rs.2,50,000 under Rule 15(1) of the CENVAT Credit Rules, 2004, but allowed CENVAT credit of Rs.36,81,538 on other items used for manufacture of specified capital goods.
Both the appellant and the department filed appeals before the Commissioner (Appeals). The Commissioner (Appeals) rejected the appellant’s appeal as time-barred, reckoning limitation from the date of issue of the adjudication order, and allowed the department’s appeal, relying upon the Larger Bench decision in Vandana Global Ltd.
