Case Law Details
Uniglobal Papers Private Limited Vs Commissioner of CGST & CX, Haldia Commissionerate (CESTAT Kolkata)
CESTAT Kolkata held that cenvat credit is available in respect of iron and steel, cement, welding electrodes etc. used in manufacture of storage tank and pollution control system.
Facts- The Appellant is engaged in the manufacture of Kraft Paper and Duplex Paper. A communication dated 28.08.2012 asking for the details of CENVAT Credit availed by them i.e. cement, welding electrode, MS plate, MS angle, channel for the period 2007-08 and 2008-09 was sent to the Appellant. The assessee submitted the details of the CENVAT Credit availed by them on the said items vide reply dated 12.09.2022.
Subsequently, a Show Cause Notice dated 28.09.2022 was issued proposing to deny and recovery of CENVAT Credit amounting to Rs.4,23,399/-. The Show Cause Notice also proposed to impose penalty in terms of Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. The Adjudicating authority vide Order dated 12.06.2015 disallowed the CENVAT Credit as proposed in the Show Cause Notice and also imposed penlaty of equal amount. On Appeal, the Commissioner (Appeals) upheld the adjudication order and rejected the Appeal before him. Hence the present Appeal before the Tribunal.
Conclusion- Hon’ble Karnataka High Court in the case of Commissioner of Central Excise, Bangalore-II v. SLR Steels Ltd. held that when once a storage tank and pollution control equipment constitutes capital goods and any raw material purchased for construction of those goods, the duty paid could be utilized as a cenvat credit by the assessee notwithstanding the fact that the storage tank is an immovable property. Therefore, the appellate authority committed a serious error firstly in holding that the storage tank is an immovable property and secondly, on the ground that it cannot be bought and sold in the market, the criteria which is totally unwarranted under the circumstances. Therefore, the Tribunal was justified in setting-aside the said order and holding that the assessee is entitled to the benefit.
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