2018 (10) TMI 1545 - AT - Central Excise

Tribunal Upholds Commissioner's Decisions, Denies Revenue's Appeals on Cenvat Credit Entitlement

Commissioner of Central Excise & Service Tax, Ghaziabad Versus M/s Bhushan Steel Ltd.

The Tribunal upheld the Commissioner (Appeals) decisions on both issues, denying the Revenue's appeals. The denial of Cenvat credit on end cuttings/scrap ... Valuation - Precision Pipes/Tubes falling under Chapter 73 of the Central Excise Tariff Act - Revenue’s only grievance that such remanant pipes emerging at the depots end were of lesser value than the value of regular pipes and as such lesser duty should have been paid by the depots, in which case lesser credit would be available to the respondents - Held that:- Revenue is not denying the fact that the issue is covered by the earlier order of the Tribunal in the same assessee’s case but submits the view adopted by the Tribunal is not correct. The issue stands decided by the Tribunal by relying upon the earlier Hon’ble Supreme Court’s order. As long as the Tribunal’s order has not been set aside by the higher Appellate Forum, the same holds the field - impugned order upheld. CENVAT Credit - welding electrodes - Held that:- The issue is covered by various decisions of the High Courts, where on similar issue, credit is allowed - credit allowed. Appeal dismissed - decided against Revenue. Issues:1. Denial of Cenvat credit on end cuttings/scrap of precision pipes/tubes generated at depots.2. Denial of Cenvat credit on welding electrodes used for repair and maintenance of capital goods/machinery.Analysis:Issue 1: Denial of Cenvat credit on end cuttings/scrap of precision pipes/tubes generated at depots:The Tribunal addressed the issue of whether the duty payment on remnant pipes at depots should be recalculated based on their scrap value, resulting in lesser credit for the manufacturer. The Commissioner (Appeals) relied on a precedent decision and set aside the demand, stating that the duty paid by the depots should be considered for credit without reevaluation based on scrap value. The Tribunal upheld this decision, citing a Supreme Court judgment supporting the manufacturer's entitlement to Cenvat credit based on duty paid by the supplier. As the Tribunal's order remained unchallenged, the denial of Cenvat credit on end cuttings/scrap was deemed unsustainable, and the appeal by the Revenue was rejected.Issue 2: Denial of Cenvat credit on welding electrodes for repair and maintenance:Regarding the denial of Cenvat credit on welding electrodes used for repair and maintenance, the Appellate Authority followed earlier Tribunal decisions and rejected the Revenue's appeal. The Tribunal found no fault in this decision, noting that various High Court decisions supported the allowance of Cenvat credit on welding electrodes. By relying on a previous order in the same assessee's case, the Tribunal upheld the decision of the Appellate Authority, concluding that there was no basis for interference in the impugned order. Consequently, the Revenue's appeal on this issue was also rejected.In summary, the Tribunal upheld the Commissioner (Appeals) decisions on both issues, emphasizing the importance of precedent decisions and legal principles governing Cenvat credit entitlement. The judgments highlighted the significance of prior rulings and established legal interpretations in resolving disputes related to duty payments and credit availment in the manufacturing sector.