Cenvat Credit eligible Despite Godown Outside Factory Premises: CESTAT Ahmedabad

United Phosphorous Ltd Vs C.C.E. & S.T.-Surat-ii (CESTAT Ahmedabad)

Introduction: The case of United Phosphorous Ltd vs. C.C.E. & S.T.-Surat-ii took a significant turn at the CESTAT Ahmedabad. The appeal addressed multiple issues, including the denial of Cenvat credit on various goods, short reversal of credit on electricity, denial of credit on renting godowns, and more.

Detailed Analysis:

1. Cenvat Credit Denial on Steel Items: The central point of contention revolved around the denial of Cenvat credit on steel items. The appellant argued that the denial was based on a precedent that was subsequently overturned by the Chhattisgarh High Court. The CESTAT, recognizing this change in legal circumstances, remanded the matter to the Adjudicating Authority for fresh consideration.

2. Short Reversal of Cenvat Credit on Electricity: The appellant did not contest the short reversal of Cenvat credit on electricity supplied to the sister concern. The CESTAT upheld the penalty, emphasizing that the related Cenvat credit was not admissible, considering the supply to the sister concern.

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