Shri Ram Agro Chemicals Pvt Ltd Vs Commissioner of CE & CGST (CESTAT Chandigarh)
Material Facts
The appeals arose from two Orders-in-Appeal dated 14.07.2020 and 15.07.2020 concerning M/s Shri Ram Agro Chemicals Pvt. Ltd., its director, M/s Sandley Industries and its director. The appellants manufacture zinc ingots and zinc sulphate fertilizer.
Based on intelligence, the DGGI initiated an investigation alleging non-compliance with Rule 6 of the CENVAT Credit Rules, 2004. During investigation, it was recorded that zinc skimming was pulverized into zinc metal and zinc ash, with the metal converted into zinc ingots and zinc ash used partly for captive consumption and partly sold. The Department alleged that zinc ash was a non-excisable by-product, that duty paid on its captive consumption and clearance was contrary to law, that CENVAT credit ought to have been reversed under Rule 6(3), and that amounts collected as duty were recoverable under Section 11D.
A show cause notice dated 12.06.2019 proposed reversal of CENVAT credit amounting to Rs.44,88,629 and appropriation of Rs.1,01,46,820 under Section 11D. The adjudicating authority confirmed the demands and imposed penalty on the director, which was upheld by the Commissioner (Appeals).
Procedural History
The appellants challenged the Orders-in-Appeal before CESTAT Chandigarh.
They relied on the Tribunal’s earlier decision in Mahesh Chemicals Allied Industries, which had dealt with an identical issue.
