Case Law Details
Oil and Natural Gas Corporation Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
Introduction: The Central Excise and Service Tax Appellate Tribunal (CESTAT) Ahmedabad in a recent case involving Oil and Natural Gas Corporation Limited (ONGC) has directed for re-adjudication to determine the admissibility of Cenvat credit. The credit was related to specific steel items used in various plants between April 2015 and June 2017.
Analysis: ONGC contended that the items – Angle, Channel, Beam, TMT Bars, HR Steel Coil, HR Steel, MS Plates, and cement – used as supporting structures in their plants, should qualify for Cenvat credit. This stance was backed by multiple judgments of High Courts and Tribunals cited by the appellant’s counsel. However, the Tribunal noted that neither the appellant had submitted the details and use of the material in the various plants, nor had the Adjudicating Authority verified these aspects. The learned Assistant Commissioner (AR), representing the Revenue, reiterated the findings of the impugned order.
Conclusion: The Tribunal, after considering all arguments and the cited judgements, concluded that ONGC’s claim of Cenvat credit’s admissibility seemed plausible. Nevertheless, CESTAT stressed the importance of verifying the actual use of the steel items in question before confirming the credit’s eligibility. The case has thus been remanded back to the Adjudicating Authority for a fresh order, underlining the critical role of proper verification in determining Cenvat credit admissibility.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The issue involved in the present case is that whether the appellant is entitled for Cenvat credit in respect of Angle, Channel, Beam, TMT Bars, HR Steel Coil, HR Steel, MS Plates and cement etc. for the period April 2015 to June 2017.
2. Shri S. Suryanarayanan, learned Counsel appearing on behalf of the appellant, at the outset submits that this issue is no longer res-integra as after the case is made out, various judgments of High Courts and Tribunals were passed therefore, the credit is admissible. He submits that all the steel items were used in various plants as supporting structure therefore, the credit is admissible. He placed reliance on the following judgments:-
(a) JK Cement Works vs. CCE – 2002 (1) RMI 1174-CESTAT New Delhi.
(b) Hindustan Zinc Limited vs. CCE – 220 SCC Online CESTAT 1392.
(c) BMM Ispat Limited vs. CCE – 2021 (3) TMI 660 – CESTAT Bangalore
(d) JSW Steel Coated Products Limited vs. CCE – 2020 (4) TMI 144-CESTAT Mumbai
(e) Amba Shakti Udyog Limited vs. CCE – 2020 (9) TMI 300 CESTAT New Delhi
(g) The Ugar Sugar Works Limited vs. CCE – 2019 (5) TMI 654 – CESTAT Bangalore.
(h)The India Sugars and Refineries Limited vs. CCE – 2019 (2) TMI 845 – CESTAT Bangalore.
3. On the query from the bench he fairly concedes that the details and use of material in the various plants was neither submitted by the appellant nor verified by the Adjudicating Authority.
4. Shri G. Kirupanandan, learned Assistant Commissioner (AR) appearing on behalf of the Revenue reiterate the findings of the impugned order.
5. On careful consideration of the submissions made by both the sides and perusal of record, we find that in this case, the appellant prima-facie appears to be eligible for Cenvat credit in the light of various judgments. However, the Cenvat credit admissibility can be ascertained only after verifying the fact about use of such steel items and whether the same was actually used. This aspect was not verified by the Adjudicating Authority therefore, in our considered view the matter needs to be remanded back to the Adjudicating Authority for passing a fresh order after verifying about the use of the inputs in various plants as claimed by the appellant. Accordingly, we set-aside the impugned order and allow the appeal by way of remand to the Adjudicating Authority.
(Pronounced in the open court on 15.06.2023)
