Appellant entitled to cenvat credit for iron ore pellets despite exemption

M/s Nilachal Iron & Power Limited Versus Commissioner of CGST & Excise, Jamshedpur

M/s Nilachal Iron & Power Limited Versus Commissioner of CGST & Excise, Jamshedpur - TMI Issues involved:
The denial of cenvat credit on iron ore pellets purchased by the appellant from a specific supplier, leading to the demand for reversal of cenvat credit, interest, and penalty.

Summary:
The appellant, a manufacturer of sponge iron, purchased duty paid iron ore pellets from a supplier for use in manufacturing. A show-cause notice alleged wrongful cenvat credit availing due to the exemption of iron ore pellets from duty payment. The demand for reversal of cenvat credit was confirmed, prompting the appeal.

The appellant argued that since they used the iron ore pellets in manufacturing and paid duty on the final product, there was no need to reverse cenvat credit. They cited relevant court decisions supporting their position. The Revenue supported the impugned order.

After hearing both parties, it was found that although cenvat credit was taken on exempted iron ore pellets, the goods were used in manufacturing and sold with duty payment. Citing precedent, it was determined that the demand for reversal of cenvat credit was not valid. The appellant was entitled to cenvat credit as the supplier had paid duty on the iron ore pellets.

The Tribunal held that the appellant correctly availed cenvat credit, setting aside the impugned order. The appeal was allowed with any consequential relief.

*(Operative part of the order was pronounced in the open court)*