2025 (2) TMI 415 - AT - Central Excise

CESTAT Mumbai allows CENVAT credit on MS ingots after appellant proves due diligence in duty-paid inputs verification

Rajuri Steel Pvt. Ltd., Dinesh Kantilal Rathi, Vinayak Kasturchand Kangaonkar, Pankaj Bansal, Mayank Mohan Kumar Bansal Versus Commissioner of CE & ST, Aurangabad

CESTAT Mumbai allowed the appeal regarding CENVAT credit on MS ingots. The tribunal found that the appellant had taken reasonable steps to ensure inputs ... CENVAT Credit - whether the appellant has received MS ingots? - HELD THAT:- It is understood from the ruling by Hon’ble Allahabad High Court in the case of CCE vs. Juhi Alloys Ltd. [2014 (1) TMI 1475 - ALLAHABAD HIGH COURT] that the manufacturer has to take reasonable steps to ensure that the goods received by it are duty paid. The copies of certain invoices submitted by the appellant on 16.01.2025 indicate the central excise duty paid nature of the inputs and all the entries required in an invoice issued by first stage dealer are entered in the same. The appellant had taken required care in respect of receipt of inputs from M/s. Shreyas Enterprises. Therefore, in view of the ruling by Hon’ble Allahabad High Court, the appellant is entitled for cenvat credit disputed in the proceedings. The impugned order set aside - appeal allowed. The issues presented and considered in the legal judgment are as follows:1. Whether the appellant received MS ingots and was eligible for cenvat credit.2. Whether the imposition of personal penalties on the remaining appellants under Rule 26 of Central Excise Rules, 2002 was justified.Issue-wise detailed analysis:Issue 1: Receipt of MS Ingots and Eligibility for Cenvat Credit- The Revenue alleged that the appellant did not physically receive MS ingots and was not eligible for cenvat credit.- The appellant argued that they had received the ingots from M/s. Shreyas Enterprises and were entitled to cenvat credit.- The Tribunal referred to a previous order where it was established that the ingots were indeed received by M/s. Shreyas Enterprises and further sold to the appellant.- The Tribunal noted that the appellant had taken reasonable steps to ensure the duty-paid nature of the inputs received.- The Tribunal found that the appellant had fulfilled all requirements for cenvat credit and was entitled to it.- Bank statements provided as evidence showed substantial payments made by the appellant to M/s. Shreyas Enterprises, supporting the receipt of goods.- The Tribunal concluded that the appellant had received the ingots and was eligible for cenvat credit, overturning the original order.Issue 2: Imposition of Personal Penalties- The original authority had imposed personal penalties on the remaining appellants under Rule 26 of Central Excise Rules, 2002.- The appellant challenged the imposition of penalties based on the argument that they had received the goods and complied with all legal requirements.- The Tribunal's finding in favor of the appellant's eligibility for cenvat credit also negated the justification for imposing personal penalties.- As a result, the Tribunal set aside the impugned order and allowed all five appeals, including the challenge against the personal penalties.Significant Holdings:- The Tribunal's core principle established was that the appellant had received the MS ingots and was entitled to cenvat credit.- The final determination was to set aside the impugned order and allow all five appeals.In conclusion, the Tribunal found that the appellant had indeed received the MS ingots and was eligible for cenvat credit, leading to the reversal of the original order and the allowance of all appeals, including the challenge against personal penalties.