Case Law Details
Vignesh Alloys Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The facts of the case are that the appellant is engaged in the manufacture of Aluminium Alloy Ingots falling under Central Excise Tariff Heading 76012010 of the CETA, 1985. They have imported inputs i.e. ‘aluminium scrap’ and directed the inputs ‘as such’ to some dealers who in-turn have resold the aluminium scrap to the appellant. The dealer has also not acted as a ‘first stage dealer’ as defined in terms of Rule 2(ij)(i) of CENVAT Credit Rules, 2004, therefore the availment of credit by the appellant based on the said dealers invoices are ineligible. During the period September 2010, the appellant has availed credit on the resold aluminium scrap amounting to Rs.26,22,870/- which appeared ineligible to the original authority. He has after due process of law gone ahead to confirm the recovery of CENVAT credit along with interest and imposed penalty. Aggrieved by such order, the appellant has taken up the matter in appeal. The learned Commissioner (Appeals) has found that the appellant has purchased goods from a dealer who has not received the scrap directly from the manufacturer or import of aluminium scrap but has received the same from the manufacturer who has imported the goods for further use in the manufacture of ingots. Therefore, the availment of credit by the appellant based on dealer’s invoices are ineligible in terms of Rule 2(ij)(i) of CENVAT Credit Rules, 2004 and went on to reject the appeal.
The case brings out that the appellants are not the manufacturer of Aluminium scrap and they have only imported the scrap for manufacture of Aluminium ingots. They cleared certain quantity of scrap ‘as such’ under Rule 3 (5) of CCR 2004 to a first stage dealer who availed credit on the same and thereafter resold to the appellant who availed credit on the said goods being inputs. According to department, the first stage dealer cannot avail credit on the aluminium scrap as the goods having removed as such. We do not find any sum or substance in such a proposition. For the purpose of Rule 2, the dealer is one who purchases ‘goods’ from the manufacturer, and is not limited to somebody who only purchases goods ‘manufactured’ by the manufacturer. We find that the whole SCN does not have any legal basis. The impugned order is set aside. Appeal is allowed with consequential relief, if any, as per law
FULL TEXT OF THE CESTAT CHENNAI ORDER
This appeal is filed by M/s. Vignesh Alloys Pvt. Ltd. against Order in Appeal No. 80/2013 dated 19.3.2013.
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