SAD liability and CENVAT credit on GTA service were remanded for fresh factual examination and reconsideration.

Liability for SAD on clearance of Manganese Ore as such could not be sustained on the existing record because the Tribunal found no categorical adjudication on whether the goods were imported stock on which SAD had been paid or indigenous stock, and the matter required fresh factual scrutiny. The related question of CENVAT credit on GTA service used for inward movement of inputs cleared as such was also sent back for reconsideration, with directions to apply the governing legal principle and examine the records afresh. The impugned order was set aside and the matter remanded de novo with an opportunity of hearing.

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Issues: (i) Whether the demand relating to clearance of Manganese Ore as such without reversal of SAD could be sustained on the existing findings and record; (ii) Whether the eligibility of CENVAT credit availed on GTA service required fresh examination in the light of the governing legal principle.

Issue (i): Whether the demand relating to clearance of Manganese Ore as such without reversal of SAD could be sustained on the existing findings and record.

Analysis: The demand turned on whether the cleared stock was imported ore on which SAD had been availed or only indigenous ore. The existing adjudication did not record a categorical finding based on the relevant records. The records produced before the Tribunal indicated that a substantial part of the quantity may relate to indigenous stock, and one quantity was also found to have been wrongly included for a period preceding import activity. Since the controversy depended upon appreciation of evidence that had not been examined in detail by the adjudicating authority, a fresh scrutiny was considered necessary.

Conclusion: The issue was remanded for fresh adjudication and no final finding on duty liability was affirmed at this stage.

Issue (ii): Whether the eligibility of CENVAT credit availed on GTA service required fresh examination in the light of the governing legal principle.

Analysis: The second component of demand concerned reversal of proportionate credit on input service used for inward movement of inputs later cleared as such. As the major demand itself was being sent back for reconsideration and the relevant records had not been fully examined earlier, this issue also required reconsideration. The authority below was directed to decide it afresh while keeping in view the legal principle governing such credit as laid down in the cited High Court decision.

Conclusion: The issue was also remanded for fresh decision.

Final Conclusion: The impugned order was set aside, the matter was sent back for de novo adjudication with an opportunity of hearing, and the appellant was directed to make a pre-deposit of Rs. 20 lakhs within the stipulated time.

Ratio Decidendi: Where determination of duty or credit liability depends on contested factual appreciation of stock and records not examined by the adjudicating authority, the matter may be remanded for fresh consideration on the basis of complete evidence.

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