Whether CENVAT Credit is allowed of the ingots and billets of thickness more than 3 inches used for manufacture of MS Bars of 6 mm.

PJ/Case Law /2016-17/3262

Case:-COMMISSIONER OF CENTRAL EXCISE, AURANGABAD Versus SALASAR STEEL INDUSTRIES

Citation:- 2016 (337) E.L.T. 293 (Tri. - Mumbai)

Brief Facts:- The brief facts of the case are that M/s. Salasar Steel Industries were using MS Ingots and billets of thickness more than 3 inches for manufacture of MS Bars of 6 mm. On the basis of a technical opinion given by Mrs. Keerti Deshpande, Chartered Engineer of M/s. Amod Consultants in the case of another party, it was alleged that the ingots and billets of thickness more than 3 inches cannot be used for manufacture of MS Bars of 6 mm. On this ground, the demand for recovery of Cenvat credit of Rs. 26,64,744/- was issued. The original authority confirmed the demand. However, the first appellate authority set aside the demand.

Appellant’s Contention:-Ld. AR there are three criteria on the basis of which admissibility of Cenvat credit is decided inputs should be duty paid, inputs should be received in the factory or inputs were not used for manufacture of final products to disallow Cenvat credit. The department has not brought any such proof on the record. Moreover, the possibility of carrying out the manufacturing activity in any other premises has also not been ruled out by the investigations.

Respondent Contention:-None appeared for respondent.

Reasoning of Judgment:-On perusal of records it is found that In the case of M/s. S.G. Zaveri Pharmapack v. Mumbai-V reported [2007 (217)E.L.T.591 (Tri.-Mum.)], it is held that even if the manufacturing facility was not available at premises of manufacturer, the Cenvat credit cannot be denied. Similar views have been taken by Hon’ble CESTAT in the case reported in 2008 (224)E.L.T.246 (Tri.-Mum.), in the case of Commissioner of Central Excise, Aurangabad v. Vaishali India Ltd. Therefore, I hold that the Department could not make out a case for disallowance of Cenvat credit in this case. In view of the above, discussions, I find that the credit availed by the appellant on ingots having thickness of more than 3 inches be allowed.

Decision:-The appeal is accordingly dismissed.

Comment:-The crux of the case is that cenvat on ingots used in the manufacture of MS bars shall be allowed based on the decisions in the case discussed above. The department was not able to prove otherwise and thus its appeal was dismissed.

Prepared by: - Bharat

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PJ/Case Law /2016-17/3262

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