TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 926
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....rming the entire demand of Rs.4,81,57,204/- invoking extended period and also appropriating an amount of Rs.6,33,676/- and interest of Rs.30,338/- paid during the investigation besides imposition of penalties under Section 15(2) of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. 3. The Ld. Advocate Shri S Jaikumar appeared on behalf of the Appellant and argued issue wise as follows: - i. Availment of CENVAT Credit of duty paid on various items including M.S. Plates, Channels, stairs and ladders, etc., received as capital goods; ii. Availment of CENVAT credit of duty paid against commercial invoices; iii. Availment of CENVAT credit of Service Tax paid on the services of testing of air in and around factory premises; iv. Availment of CENVAT Credit of Service Tax paid in respect of reimbursement to seller of coal under debit notes and v. Reversal of CENVAT credit availed on inputs and input services which were used in the manufacture of non-excisable goods viz. electricity wheeled out. 4.1 With respect to the availment of CENVAT Credit of duty paid on various items including M.S. Plates, Channels, stairs and ladders, etc., received as ....
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....7 (11) TMI 23-SC] b) Mohan Breweries & Distilleries Ltd. [2010 (8) TMI 281 MADRAS HIGH COURT] c) GKW Ltd. [2015 (1) TMI 374 CESTAT MUMBAI] 5. In respect of the CENVAT Credit availed on commercial invoices to the tune of Rs.73,841/-, the Ld. Counsel has conceded to the demand and during the hearing before the Tribunal submitted that they would not agitate the same. What is agreed to, needs no discussion. 6. In respect of availment of the CENVAT Credit of the service tax paid towards air testing services, he would submit that the Appellant had availed input service credit of Rs. 52,483/- on invoices issued by M/s. Envirocare India Pvt. Ltd. who had provided services of testing of air in and around factory premises. He has submitted that, it is the mandate of law to undertake sampling and analysis of hazardous waste and Pollution Control Equipment is considered as a Capital Good in terms of Rule 2(a)(A)(iii) of CENVAT Credit Rules, 2004 and hence, credit availed on the service of monitoring air pollution is very much eligible. Reliance in this regard was placed on the decision of CESTAT, Ahmedabad in the case of Coromandel International Ltd. [2024 (1) TMI 246 CESTAT AHMEDABAD] w....
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....eration. 8.3 The credit attributable to inputs used in manufacture of electricity w.r.t 30MW power plant has been reversed. However, as alleged in the SCN and confirmed in OIO, the Appellant has not reversed credit availed to the tune of Rs.3,87,29,140/- on inputs used in 8MW power plant as the input being 'flue off gases' generated in the instant case is a by-product in the process of manufacture of sponge iron. The mere fact that these gases are used in generation of electricity cannot justify the department's interpretation that these are Cenvatable inputs used for manufacture of non-excisable goods i.e., electricity. It is pertinent to note that the above facts were admitted as detailed in para 04.01 of the SCN. 8.4 It was submitted that the flue gas emerges on its own volition without feeding any inputs specifically for this purpose. Therefore, the credit of specified duty shall not be denied on the ground that a part of inputs is contained in any waste, refuse or by-product, etc. In this regard reliance was placed on the Appellant's own case reported in [2022 (6) TMI 555 - CESTAT CHENNAI] wherein the benefit of credit has been extended to the said by product....
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....ent's interpretation that these are Cenvattable inputs used for manufacture of non-excisable goods i.e., electricity. 9. Shri M. Selvakumar, the Ld. Authorized Representative appeared for the Department and has reiterated the findings of the Ld. Adjudicating Authority. In respect of the availment of CENVAT Credit on the various items availed as capital goods, he would place reliance on the ratio of the decision of the Larger Bench in the case of Vandana Global Ltd. Vs. CCE, Raipur [2010 (253) ELT 440 (Tri. LB)]. With respect to the availment of CENVAT Credit on the service tax paid on the testing services of air, the Ld. AR would fairly admit the eligibility. Finally, with respect to the demand of reversal of CENVAT Credit availed on inputs and input services which were used in the manufacture of non-excisable by products namely steam and its subsequent generation of electricity, he would reiterate the findings of the Ld. Adjudicating Authority. 10. Heard both sides and carefully considered their submissions, appeal records and the case laws relied upon. A. Eligibility of Cenvat Credit on M.S. Plates, Channels, Stairs and Ladders: 11. It is not in dispute that the various i....
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....visions and judicial pronouncements on the subject. 4. As clearly stated in para 3 of Boards' above circular dated 2.4.2012, it is once again reiterated that in terms of the Rule 2(k) of the CENVAT Credit Rules, 2004, while CENVAT Credit is available in respect of parts of Boiler, the same is not admissible in respect of the structural components used for laying of foundation or making of structures for support of capital goods/ Boiler. The above clarification is in conformity with the views expressed in the judgments of the Hon'ble Supreme Court/ different benches of the CESTAT. 5. Trade, industry and field formations may be suitably informed. 6. Hindi version will follow Yours faithfully (Madan Mohan) Under Secretary (CX.1) _______ Circular No.964/07/2012-CX F. No. 84/1/2011-CX-1 Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs New Delhi, dated 2nd April, 2012 To Al Chief Commissioners of Central Excise & Customs, Al Chief Commissioners of Central Excise, Al Directors Generals Sir/Madam, Subject: Clarification regarding classification of structural components of Boiler and admissibility....
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....efinition of inputs, as these are not used for laying of foundation or making of structures for support of capital goods, but are essentially the part of said Boilers. 4. Trade, industry and field formations may be suitably informed. 5. Hindi version will follow. Yours faithfully, (Madan Mohan) Under Secretary (CX1) 12. Further, the Appellant has also placed reliance on the decisions of M/s. Sri Sai Sindhu Industries Ltd. [2016 (8) TMI 484 CESTAT HYDERABAD] and Steel Strips Wheels Ltd. [2022 (9) TMI 797 CESTAT CHENNAI]. In the case of Steel Strips Wheels Ltd., supra, the Single Member, considering the ratio of the High Court in the case of India Cements [2015 (3) TMI 661-MADRAS HIGH COURT], has held that the CENVAT Credit on support structures which have used M.S. Plates, angles etc. are eligible as capital goods. Similarly in the case of Sri Sai Sindhu Industries Ltd., supra, after duly considering the above two circulars, the Single Member has allowed the CENVAT Credit of similar items. It is evident from the SCN dated 19.03.2014 that the Appellant have taken Cenvat Credit on the basis of invoices raised by M/s. Cethar Vessels Ltd. for supply of various support structu....
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....partment to show that the boiler can function without the support structures." 13. The reliance placed on the larger bench decision of the Tribunal in case of Vandana Global Ltd. Vs. CCE, Raipur [2010 (253) ELT 440 (Tri. LB)] does not come to the rescue for the Department as the same has been reversed by the Hon'ble High Court of Chhattisgarh [2018 (16) GSTL 462 (Chatt.)]. The Appellants contention that there cannot be a reclassification at the receivers end also has force. 14. In the case of M/s. India Cements Ltd. Vs. Commissioner of Customs, Excise and Service Tax [2015 (3) TMI 661-MADRAS HIGH COURT], the Hon'ble Madras High Court has held as follows: - "8. Heard learned counsel appearing for the assessee and the learned Standing Counsel appearing for the Revenue and perused the materials placed before this Court. 9. It is not in dispute that the impugned goods were used for fabrication of structurals to support various machines like crusher, kiln, hoopers etc. and that without these structurals, the machinery could not be erected and would not function. 10. In the case of Commissioner of Central Excise, Jaipur V. Rajasthan Spinning & Weaving Mills Ltd., reported in ....
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....pe of the show-cause notice. So, the case of M/s.Triveni Engineering & Industries Ltd. (supra) as relid upon by the learned AR is not applicable in the present case." 11. Asfar as the reliance placed on the decision reported in 2011-TIOL-73-SC-CX (Saraswati Sugar Mills V. Comissioner of Central Excise, Delhi - III) in Civil Appeal No.5295 of 2003 dated 02.08.2011 by the learned Standing Counsel appearing for the Revenue is concerned, we find that this Court had earlier considered the case of the assessee in two similar cases of the previous assessment years in C.M.A.No.1301 of 2005 dated 31.12.2012, where a reference was made to an order passed earlier in respect of the very same assessee. While dismissing the appeal filed by the Revenue, the Division Bench of this Court held as follows: "8. Even though learned standing counsel appearing for the Revenue submitted that the judgment in the assessee's own case reported in AIT-2011-358-HC (The Commissioner of Central Excise V. M/s.India Cements Limited) had been appealed against, as of today, there are no details; in any event, the fact herein is that the Revenue does not controvert the facts found by the Assistant Commissioner....
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.... M/s. Starcoal India Private Limited and related invoices and a copy of one of the invoices is extracted below: - A perusal of the above debit note or service tax invoice clearly indicates that Service Tax Registration Number and all other details are incorporated as required. Details of service tax paid are also discernable. As such, denial of the credit is not justified and the same is to be allowed as there is substantive compliance which stands undisputed. 18. Further, the Appellant had also availed credit on the services provided by M/s. Envirocare India Pvt. Ltd. to the tune of Rs.52,483/-. These services are meant for testing of air in and around their factory premises. The Department held the view that the Appellant is not eligible for this input service credit in terms of Rule 2(l) of the CENVAT Credit Rules, 2004 as this is not related directly or indirectly, or in or in relation to manufacture of final products. However, the Appellant's contention is that input credit is available on pollution control equipment and other related activities as such contested the denial of the credit. It is quite obvious that testing of air in and around the factory premises as the pollu....
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....le 6 of the Cenvat Credit Rules, 2002 makes provision for "Obligation of manufacturer of dutiable and exempted goods". Sub-rule (1) thereof provides that CENVAT Credit shall not be allowed on such quantity of inputs which is used in the manufacture of exempted goods, except in the circumstances mentioned in sub-rule (2). Sub-rule (2) provides that where a manufacturer avails of Cenvat Credit in respect of any inputs and manufactures such final products which are chargeable to duty as well as exempted goods, then, the manufacturer shall maintain separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and the quantity of inputs meant for use in the manufacture of exempted goods and take Cenvat Credit only on that quantity of inputs which is intended for use in the manufacture of dutiable goods. Sub-rule (3) of Rule 6 makes provision for the conditions which a manufacturer of goods opting not to maintain separate accounts is required to follow. 8. Thus, on a plain reading sub-rule (1) of Rule 6, it is apparent that CENVAT credit is admissible in respect of the inputs used in the manufacture of dutiable goods and ....
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....hat there was no way by which the respondent could have manufactured ethylene and propylene for producing ethane and methane. The Court held that it was not as if by using a smaller quantity of raw materials or other goods involved in the process, the respondent could have averted the emergence of ethane and methane. In other words, in the technology utilized for the manufacture of ethylene and propylene, the emergence of ethane and methane was inevitable. Hence, while it was no doubt correct to say that ethylene and propylene had been used in or in relation to manufacture of ethane and methane, the identical quantity of the same goods had simultaneously been used in the manufacture of ethylene and propylene. The emergence of ethane and methane therefore, by itself, was not a ground to deny the benefit of the exemption notification. 10. In the facts of the present case, it is not as if by using a smaller quantity of input Hydrochloric Acid, the respondent could have averted the emergence of Mother Liquor. In other words, in the technology utilized by the respondent for the manufacture of Gelatin, the emergence of Mother Liquor was inevitable. Hence, while it is no doubt correct t....