TaxTMI 
TaxTMI 
2021 (12) TMI 75
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....is common order. 2. OTAPL No.4 of 2018 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? ....
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...., the facts in OTAPL 4 of 2018 alone are discussed. The Respondent Company 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....
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....r the inputs in relation to the manufacture of specified capital goods and further used in the 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 su....
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.... adopted by the Hon'ble Supreme Court, various High Courts and by this Tribunal also. Accordingly, we find no reason 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 ....
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....ssessee then went before the CESTAT. The penalty was reduced by the CESTAT and the duty demand was affirmed. The Assessee then appealed 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....
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....Madras High Court in CCE, Salem v. Madras Aluminium Co. Ltd. 2017 (349) ELT 133 (Mad.) also deployed a similar test. The decision of the said Madras High Court in India Cements Ltd. 2012 (285) ELT 341 (Mad.) which has discussed the decision of the Supreme Court in Saraswati Sugar Mills is also relevant in this context. 16. The view taken by the CESTAT is consistent with the decisions of the Madras High Court in CCE, Salem v. Madras Aluminium Co. Ltd. and India Cements Ltd. (supra). 17. For the aforementioned reasons, the questions framed by this Court are answered as under: a. Question (i) is answered in the affirmative by holding that the CESTAT was justified in dismissing the Department's appeal since the credit was claimed....