Tribunal allows appeals on duty demand, cenvat credit denied in July 2015 overturned

The Tribunal allowed the appeals, ruling that the duty demand on intermediate products was not sustainable as clearances were made under International Competitive Bidding. The denial of cenvat credit for July 2015 was set aside, as the duty paid on intermediate products would be eligible for credit, making Rule 9(1)(b) of CCR 2004 inapplicable.

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Issues Involved:
1. Liability to pay duty on intermediate goods.
2. Denial of cenvat credit for the period July 2015.

For the first issue of liability to pay duty on intermediate goods, the appellant, engaged in manufacturing industrial valves and gaskets, availed cenvat credit on inputs, capital goods, and input services. The department alleged that the appellant supplied control valves to Mega Power Projects without paying excise duty, and some sub-assemblies were cleared without duty payment. The department argued that the benefit of certain notifications was not available to the appellant. Show cause notices were issued, and after due process, duty, interest, and penalties were confirmed by the original authority and upheld by the Commissioner. The appellant contended that they were not liable to pay duty on intermediate goods as per relevant notifications and rules. The Tribunal, following precedent cases, held that duty demanded on intermediate products cannot be sustained, as the clearances were made under International Competitive Bidding.

Regarding the second issue of denial of cenvat credit for the period July 2015, the appellant had availed credit based on supplementary invoices issued when duty was paid due to a demand invoking the extended period. The adjudicating authority confirmed the demand, and the appellant paid the amount and availed credit. The department proposed to deny credit under Rule 9 (1) (b) of CCR 2004. However, since the duty demand on intermediate products was set aside, the duty paid would be eligible for credit, and the bar under Rule 9 (1) (b) of CCR 2004 would not be applicable. The Tribunal set aside the impugned order denying cenvat credit for the period July 2015.

In conclusion, the appeals were allowed with consequential relief, if any, on the basis that the duty demand on intermediate products could not be sustained, and the denial of cenvat credit for the period July 2015 was set aside.

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