TaxTMI 
TaxTMI 
2021 (12) TMI 75
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....is directed against an order dated 12th July, 2017 passed by the Customs, Excise and Service Tax Appellate Tribunal, East Zonal Bench, Kolkata (CESTAT) in Excise Appeal No.232 of 2007 allowing structural materials as inputs and thereby allowing the Respondent CENVAT Credit in the sum of Rs. 1,19,59,360.67. 3. While admitting this appeal on 17th July, 2019, the following questions of law were framed by this Court for consideration: "(i) Whether under the facts and circumstances of the case, the Tribunal is justified in dismissing the appeal without considering the facts that the items claimed as inputs have been used for fabrication items of supporting structures of the capital goods? (ii) Under the facts and circumstances of the case,....
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....ompany had obtained a Central Excise Registration under Section 6 of the Central Excise Act, 1944 (CE Act) for the purposes of manufacturing of sponge iron and its derivative products. For manufacturing, the Respondent constructed/installed 4 100TPD Sponge Iron Plant and availed CENVAT Credit on input on various items during the relevant period i.e. from May to August, 2004. A part of the inputs included construction materials. 7. On 7th June, 2005, the Commissioner, Central Excise & Customs, Bhubaneswar issued a Demand-cum-Show Cause Notice to the Respondent inter alia on the following grounds: "(i) The amount of Rs. 1,20,61,289/- on inputs taken wrongly by the notice during the month from May, 2004 to August, 2004 shall not be recovere....
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....he factory of the manufacturer under the 2002 Rules. A sum of Rs. 1,01,983/- was disallowed being the CENVAT Credit wrongly availed during the period from May to August, 2004. Correspondingly, a penalty of Rs. 10,000/- was imposed. 10. The Department then filed an appeal before the CESTAT. By the impugned order, the CESTAT dismissed the Department's appeal inter alia observing as under: "6. "On careful examination, we also rely on decision of Hon'ble Madras High Court in CCE, Salem Vs. Madras Aluminum Co. Ltd. 2017 (349) ELT 133 (Mad.) which also deals with the scope of credit on similar items and also application of the concept of support structure while deciding the dispute. 7. Ld. A.R. also relied on the decision of Hon'ble....
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....n to interfere in the said order. The appeal is dismissed." 11. This Court has heard the submissions of Mr. Choudhury Satyajit Mishra, learned Senior Standing Counsel for the Appellants-Department and Mr. Ravi Raghavan, learned counsel for the Respondents. 12. Mr. Mishra placed reliance on the decision of the Supreme Court in Saraswati Sugar Mills v. Commissioner of Central Excise, Delhi 2011 (270) E.L.T. 465 (S.C.) and urged that the CESTAT was in error in holding the structural inputs to be part of capital goods. 13. This Court has carefully examined the aforementioned decision of the Supreme Court of India. The facts there were that the assessee was the manufacturer of sugar and molasses and was availing MODVAT credit facility on the....
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....ealed to the Supreme Court. 13.4 It was observed by the Supreme Court that "in order to get the benefit of non excise duty on Iron and Steel Structures, it had to be established by the assessee that Iron and Steel Structures are utilized as component parts for the finished products, viz. vacuum pan, crystallizers, sugar grader, elevator, cooling tower etc." The Supreme Court then factually found that the iron and steel structures would not go into the composition of vacuum pans, crystallizers etc. and, therefore, do not satisfy the description of components. 13.5 The Assessee attempted to rely on a circular dated 2nd December, 1996 issued by the Central Board of Excise and Customs clarifying that the scope of the entry under Rule 57Q was ....