Case Law Details
Sarva Mangalam Gajanan Steel Pvt Ltd Vs Commissioner of CGST & Central Excise (CESTAT Kolkata)
CESTAT Kolkata held that CENVAT credit on the ‘inputs’ used in the manufacture of their final products, namely, Rerolled products, MS Flat/Bar, MS Angle, MS Channel, MS Round etc which is cleared on payment of central excise duty, is duly available.
Facts- A Show Cause Notice dated 23/04/2015 was issued to the Appellant alleging that they have contravened the provisions of Rule 3 read with Rule 9 of the CENVAT Credit Rules, 2004, inasmuch as they have wrongly availed CENVAT credit on Scrap (Misrolls & End Cuttings), MS Scraps. TMT Cuttings, MRM Rolls Spoil amounting to Rs.1,32,05,296/-, Education Cess amounting to Rs.2,64,769/- & SHE Cess amounting to Rs.1,31,914/-, totaling to Rs.1,36,01,979/- during the period from April, 2010 to February, 2015, by wrongly treating the same as ‘inputs’.
The allegation in the Notice is that it is practically impossible for the Appellant to manufacture MS Flat, Bar, MS Angle, MS Channel, MS Round from the said scraps mainly falling under TSH No. 72044100, since the said Appellant is only a Rolling Mill and does not have furnace for melting of such waste and scrap. The Notice proposed to disallow the irregular credit under Rule 14 of the Cenvat Credit Rules, 2004, read with proviso to erstwhile Section 11A (present Section 11A (4)) of the Central Excise Act, 1944 along with appropriate interest under Rule 14 of CENVAT Credit Rules, 2004 read with proviso to erstwhile section 11AB (present Section 11AA) of the said Act. The Notice also proposed penal action under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act 1944. Another Notice was issued earlier on 28.02.2013 covering the period 21.06.2008 to 23.03.2010, proposing disallowance of CENVAT credit amounting to Rs 92,75,862.
Conclusion- We find that the Rerolled products, MS Flat/Bar, MS Angle, MS Channel, MS Round etc, manufactured by the Appellants have been cleared on payment of central excise duty. As the inputs on which credit has been availed, were used in the manufacture of dutiable final products, the CENVAT credit availed on these inputs cannot be denied. In view of the above, we hold that the Appellants are eligible for the CENVAT credit availed on the ‘inputs’ used in the manufacture of their final products namely, Rerolled products, MS Flat/Bar, MS Angle, MS Channel, MS Round etc and hence the demands made in the impugned order is not sustainable.
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