2018 (8) TMI 1389 - AT - Central Excise

Tribunal Ruling: Cenvat Credit upheld for CVD, dropped for input service credit.

The Tribunal upheld the demand on Cenvat Credit of CVD but dropped the demand on proportionate input service credit. The Tribunal also ruled in favor of ... Non-reversal of CENVAT Credit - violation of provision of Rules 2 & 3 (5B) of Cenvat Credit Rules, 2004 - loss of inputs due to cyclone - Held that:- The provision of Rule 3 (5B) does not require reversal of Cenvat Credit on inputs if it had entered the manufacturing process rather, it calls for reversal only if the inputs are written off in full or any provision to write off in full has been made in the books of alcs. There is no provision of reversal of credit availed on inputs which has been destroyed - credit availed on inputs destroyed in natural calamity including cyclone, need not be reversed as it does not amount to removal of input as such. Inputs lost during the process of manufacture are not required to be considered for reversal of credit - credit remains allowed. CENVAT Credit - inputs - H.R. coils used in manufacture of capital goods - Held that:- In the present case, the assessee had furnished details of input (H.R. Coils) used in the manufacture of Klin/Stroage Tank. Therefore, there is no reason to disallow Cenvat Credit availed on H.R. Coil used in the manufacture of capital goods - credit allowed. CENVAT credit - duty paying invoices - original copy of STTG Certificate not available - Held that:- The Chief Commercial Manager of South Eastern Railway, Kolkata has issued statement of Service Tax for the month of August 2014, mentioning the name of the assessee as consignee wherein the amount of Service Tax of ₹ 66,668/- has been detailed. The said statement has been filed by the Consultant in the course of hearing and placed on record - Considering the available document as valid and sufficient proof for availing Cenvat Credit, the credit is allowed. Appeal allowed - decided in favor of appellant. Issues:1. Demand of Cenvat Credit reversal on Coal and Iron Ore Fines2. Demand confirmation on Cenvat Credit of CVD3. Demand confirmation on Cenvat Credit of imported steamed Coal4. Demand confirmation on Cenvat Credit of Cement and H.R. Coil5. Demand on Cenvat Credit availed without STTG Certificate6. Appeal against Adjudication Order upheld by Ld. Commissioner (Appeals)Issue 1:The Adjudicating Authority dropped the demand of Rs. 2,27,425 on proportionate input service credit but confirmed the demand of Rs. 2,81,555 on Cenvat Credit of CVD. The appellant argued that the credit on inputs destroyed in a natural calamity, like a cyclone, need not be reversed as it does not constitute removal of goods. The Tribunal agreed, citing a Bombay High Court decision and the assessee's submission of details in stock registers and periodic returns.Issue 2:Regarding imported steamed Coal, the Adjudicating Authority confirmed the demand of Rs. 1,50,748 and imposed a penalty. The appellant had reversed the credit but contested the penalty. The Tribunal found in favor of the appellant, stating that there was no reason to disallow the Cenvat Credit availed on the imported Coal.Issue 3:The demand confirmation on Cenvat Credit of Cement and H.R. Coil was upheld by the Adjudicating Authority. The appellant had reversed the credit but disputed the penalty. The Tribunal found that there was no ground for disallowance of the Cenvat Credit on H.R. Coils used in the manufacture of capital goods.Issue 4:The demand on Cenvat Credit availed without STTG Certificate was partially disallowed by the Adjudicating Authority. The appellant argued that the Railway Department's endorsement on documents should suffice. The Tribunal agreed, considering the available document as valid proof for availing Cenvat Credit.Issue 5:The Ld. Commissioner (Appeals) upheld the Adjudication Order, leading to the present appeal before the Tribunal. The appellant contested the penalties imposed, stating that they had already deposited the demanded amounts along with interest. The Tribunal reviewed the demands and penalties, ultimately setting aside the Impugned order and allowing the appeal filed by the appellant with any consequential relief.This detailed analysis of the judgment covers all the issues involved and provides a comprehensive understanding of the legal reasoning and decisions made by the Tribunal.