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of <h1>Tribunal upholds pig iron shortage demand but allows credits on iron products</h1> <h3>M/s Ramsarup Lohh Udyog Versus Commissioner of Central Excise, Haldia</h3> M/s Ramsarup Lohh Udyog Versus Commissioner of Central Excise, Haldia - TMI Issues involved:The issues involved in the judgment are the shortage of pig iron, irregular availment of credit on iron and steel products, disallowed credit on welding electrodes and MIG wires, and disallowed credit on iron ore fines.Shortage of Pig Iron:The appellant was found to have a shortage of 189.50 M.T of pig iron during a stock verification. The Commissioner confirmed a demand of Rs. 3,80,611/- on the shortages and imposed a penalty equivalent to the amount of duty. The Appellant failed to provide a valid reason for the shortages and paid the duty, cess, and interest on the shortages. The Tribunal upheld the demand of duty, cess, interest, and penalty on the shortages due to lack of proper explanation.Irregular Availment of Credit on Iron and Steel Products:The Commissioner disallowed an amount of Rs. 5,82,44,793.93 irregularly availed and utilized by the appellant on iron and steel products like Angles, Channels, Beams, Joists. The Tribunal held that these items were used in the manufacture of capital goods, including pollution control systems, making them eligible for credit. The Tribunal allowed the credit on these items used in the manufacture of capital goods.Disallowed Credit on Welding Electrodes and MIG Wires:The Commissioner disallowed credit of Rs. 33,63,796.67 on welding electrodes and MIG wires. The Appellant argued that these items were used in the manufacture of capital goods and in repairs and maintenance of plant and machinery, making them eligible for credit. Citing relevant case law, the Tribunal allowed the credit on welding electrodes and MIG wires used in repairs and maintenance of machinery.Disallowed Credit on Iron Ore Fines:The Commissioner disallowed credit of Rs. 23,670.68 on 73.66 M.T of iron ore fines, alleging they were not used in the manufacture of final products. The Appellant contended that the fines were thicker in size and could be used in their DRI plant to produce sponge iron. The Tribunal found no evidence to disprove this claim and held that the Appellant was eligible for the credit on the iron ore fines.Conclusion:The Tribunal upheld the demand on the shortage of pig iron but set aside the demands on iron and steel products, welding electrodes, MIG wires, and iron ore fines. The impugned order was modified accordingly, and the appeal was disposed of in favor of the Appellant.
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