2018 (9) TMI 2136 - AT - Central Excise

Court Overturns Denial of Cenvat Credit for Iron and Steel Manufacturer; Revenue's Allegations Lack Evidence.

Allied Recyling Limited Versus CCE & ST-Ludhiana

Allied Recyling Limited Versus CCE & ST-Ludhiana - TMI Issues: Denial of Cenvat credit on certain inputs - Allegation of inputs being finished goods for another industry - Lack of evidence and investigation by Revenue - Applicability of CBEC CircularIn this case, the appellant, engaged in the manufacturing of Iron, Steel Ingots, and Billets, appealed against the denial of Cenvat credit on inputs such as C.R. Sheets, Rounds, H.R. Coils by the Revenue. The Revenue contended that these inputs were finished goods for another industry, thus not eligible as inputs for the appellant. The appellant argued that no evidence was presented by the Revenue to prove that the inputs were not received, and the denial was based on presumption. The appellant cited CBEC Circular No. 690/6/2003-CX to support their entitlement to Cenvat credit. The Revenue supported the impugned orders during the proceedings.After hearing both parties, the Hon'ble Member (Judicial) observed that the Revenue's allegation was solely based on the assumption that the inputs received by the appellant were finished goods for another industry, without conducting any investigation into the receipt of inputs by the appellant. The lack of evidence led to the allegation being deemed unsustainable. Referring to CBEC Circular No. 690/6/2003-CX, which clarified the nature of inputs like 'Steel former' as consumed in the manufacturing process, the Member concluded that the denial of Cenvat credit to the appellant was unjustified. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief.