Case Law Details
Commissioner of Central Excise, Customs and Service Tax Vs Viraj Steel and Energy Limited (CESTAT Kolkata)
The Commissioner of Central Excise challenged Viraj Steel and Energy Limited’s CENVAT credit claims on various steel items. This led to an appeal, resulting in a crucial ruling by CESTAT Kolkata.
The crux of the matter lay in whether the steel items procured by Viraj Steel qualified as ‘input’ or ‘capital goods’ under the CENVAT Credit Rules, 2004. The Revenue contended that these items were not integral to the sponge iron manufacturing process. However, Viraj Steel argued that these items were essential for fabricating plant and machinery, thus aiding in their final product manufacturing.
During the hearing, Viraj Steel presented a certificate from a Chartered Engineer, validating the usage of these items for fabrication purposes. CESTAT Kolkata, considering the evidence and legal precedents, including the case of M/s. Vandana Global Ltd. v. Commissioner of C.Ex. & Cus., Raipur, ruled in favor of Viraj Steel. The tribunal allowed CENVAT Credit, acknowledging the usage of steel items in fabricating structures essential for installing capital goods, which contributed to the final product’s manufacture.
However, a minor demand, not contested by Viraj Steel, was confirmed, requiring payment along with interest. Nevertheless, no penalty was imposed on Viraj Steel, considering the circumstances of the case.
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