Steel Authority of India Limited Vs Commissioner of CGST And Central Excise (CESTAT Kolkata)
Summary: The appellant, Durgapur Steel Plant, a unit of Steel Authority of India Limited and a Government of India undertaking, manufactures various iron and steel products including billets, blooms and TMT bars. It avails CENVAT credit on inputs and capital goods, including refractory bricks used in the manufacture of its final products. The dispute concerned waste and scrap arising after such refractory bricks had been used in the manufacturing process. The Tribunal considered the Rule 3(5A) of the CENVAT Credit Rules, 2004 and the Revenue’s contention that the refractory bricks were capital goods.
The appellant had cleared waste and scrap of used refractory bricks without payment of duty, relying upon the Tribunal’s decision in Vasavadatta Cement Vs. Commissioner of Central Excise, Belgaum [2003 (157) E.L.T. 272 (Tri.-Bang.)]. The appellant also furnished Annual Operation Statistics to the jurisdictional Range Office, reflecting clearances of waste and scrap for financial years 2005-06, 2006-07 and 2007-08.
Four show cause notices dated May 3, 2010, July 1, 2010, March 10, 2011 and January 18, 2012 covered the period from May 2005 to March 2011. The first notice alleged contravention of Rules 4, 5, 6, 8, 10 and 12 of the Central Excise Rules, 2002 and sub-rule (5A) of Rule 3 of the CENVAT Credit Rules, involving a duty demand of Rs. 78,23,816 for May 2005 to May 2009, together with interest under Section 11A of the Central Excise Act, 1944, interest under Sections 11AB/11AA and penalty under Section 11AC read with Rule 25. The aggregate duty demand under the four notices was Rs. 98,00,064.
