Case Law Details
Commissioner of Central Excise, Customs and Service Tax Vs Viraj Steel and Energy Limited (CESTAT Kolkata)
The case Commissioner of Central Excise, Customs, and Service Tax vs. Viraj Steel and Energy Limited was brought before the CESTAT Kolkata, with both the appellant and the respondent appealing against the impugned order. The facts of the case revolve around the assessee, engaged in the manufacture of sponge iron, availing CENVAT Credit on various steel items, treating them as ‘capital goods’ and ‘inputs’ under the Central Excise Tariff Act.
The Revenue disputed the classification of these items as inputs or capital goods, arguing that they did not qualify as such for the manufacture of sponge iron. Show Cause Notices were issued to deny the CENVAT Credit availed by the assessee on these items. Following adjudication, a portion of the CENVAT Credit was allowed, acknowledging the use of these items in the fabrication of the plant for manufacturing the final product. However, another part of the credit was denied due to the inability of the assessee to demonstrate the application of these items in the production process.
Both parties appealed against the decision, with the Revenue raising objections to the amount involved, which was below the prescribed monetary limit for litigation before the CESTAT. On the merits, the assessee argued that all the items were indeed used in the fabrication of their plant and machinery, supported by a certificate from a Chartered Engineer validating their usage.
The Revenue reiterated its stance, but the CESTAT, after hearing both parties, upheld the assessee’s claim. It found that the items in question were indeed utilized in the fabrication of structures for the installation of capital goods, which were crucial in the manufacturing process of the final product. The decision was supported by a precedent set by the Hon’ble Chhattisgarh High Court in the case of M/s. Vandana Global Ltd. v. Commissioner of C.Ex. & Cus., Raipur [2018 (16) G.S.T.L. 462 (Chhattisgarh)].
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