2017 (12) TMI 547 - AT - Central Excise

Tribunal upholds duty demand on aluminum ingots, denies Cenvat credit due to inadequate documentation

Tirupati Metal Works, Shri Sanjay Gupta Versus Commissioner of Central Excise, Delhi-II

The Tribunal upheld the Commissioner's decision in a case involving duty demand on aluminum ingots sent to a principal manufacturer, amounting to ... Area Based Exemption - Job work - Benefit under N/N. 214/86 - As the principal manufacturer was enjoying the area based exemption notification, Revenue was of the opinion that the job worker could not have sent the aluminum ingots to the principal manufacturer without payment of duty inasmuch as the final product of the principal manufacturer was exempted - Held that: - The goods apparently have been cleared from the appellants premises back to M/s. Superlink Poly Fab Ltd. without payment of duty. Since the principal manufacturer, after receipt of goods from the appellant did not clear his final products on payment of duty, the benefit of job work N/N. 214/86 will not be available to the appellant - appeal dismissed - decided against appellant. Issues involved:1. Denovo proceedings by the Commissioner after remand by the Tribunal.2. Duty demand on aluminum ingots sent to principal manufacturer.3. Cenvat credit denial due to lack of legible documents.4. Claim for cenvat credit on duty paid on waste and scrap.5. Proper valuation adopted for calculating duty.1. Denovo proceedings by the Commissioner after remand by the Tribunal:The Tribunal remanded the matter to the Commissioner for denovo proceedings after the Final Order dated 15.2.2012, directing certain considerations. The Commissioner confirmed the demand of duty amounting to approximately &8377; 2.27 crores and denied Cenvat credit of around 1.45 crores due to inadequate documentation by the appellant. The Tribunal upheld the Commissioner's decision, stating that the appellant must pay duty on clearances made to the principal manufacturer.2. Duty demand on aluminum ingots sent to principal manufacturer:The appellant, engaged in manufacturing aluminum ingots for a manufacturer enjoying area-based exemption, sent the ingots back without duty payment. The Revenue contended that duty should have been paid since the final product of the principal manufacturer was exempted. The demand of duty amounting to &8377; 2.27 crores was confirmed by the Commissioner and upheld by the Tribunal.3. Cenvat credit denial due to lack of legible documents:The Commissioner denied Cenvat credit of around 1.45 crores to the appellant, citing the lack of legible documents. The Tribunal concurred with this decision, emphasizing the importance of proper documentation for extending Cenvat credit benefits.4. Claim for cenvat credit on duty paid on waste and scrap:The Tribunal directed the Commissioner to consider the appellant's claim for Cenvat credit on duty paid on waste and scrap. However, the claim was denied in the impugned order due to the appellant's failure to produce original copies of the Bill of Entry. The Tribunal disallowed the Cenvat credit based on legal reasons related to the import of scrap by the principal manufacturer.5. Proper valuation adopted for calculating duty:The appellant challenged the valuation adopted for calculating the duty, alleging improper valuation. However, the adjudicating authority provided detailed justifications for the valuation in the impugned order. The Tribunal upheld the valuation adopted, citing the detailed findings by the adjudicating authority.In conclusion, the Tribunal found no reason to interfere with the impugned order, sustaining the decision of the Commissioner and dismissing the appeals.