CENVAT credit on construction materials for clinker silos remanded for fresh adjudication, with penalties set aside pending reconsideration.

CENVAT credit on iron and steel materials and cement supplied free of cost for construction of clinker silos was held to require reconsideration in light of applicable precedent. The Tribunal noted that the dispute concerned materials used in civil construction linked to the silos and followed earlier decisions relied on by the appellant. The matter was therefore remitted to the adjudicating authority for de novo decision on the basis of the evidence and pleadings, and the penalty could not be sustained at that stage. The penalties were set aside pending fresh adjudication.

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Issues: Whether the denial of CENVAT credit on iron and steel materials and cement supplied free of cost for construction of clinker silos, and the consequential penalty, required reconsideration in light of the applicable precedent.

Analysis: The dispute concerned credit taken on materials used in the civil construction connected with clinker silos. The matter was covered by earlier decisions relied on by the appellant, and the Tribunal followed the same course adopted in those cases. In view of the precedent, the appropriate course was to remit the matter to the adjudicating authority for fresh decision on the basis of the evidence and pleadings. Since the issue required fresh adjudication, the penalty could not be sustained at this stage.

Conclusion: The matter was remanded for de novo consideration and the penalties were set aside.

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