INDIA CEMENTS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Whether disallowance of Cenvat credit taken by the appellant on M.S. Rod, Sheets, M.S. Channel, M.S. Plate, Flats etc., amounting to Rs. 1,44,390/ - (for the period from April, 2009 to November, 2009) and Rs. 1,26,242/ - (for the period from December, 2009 to June, 2010) is correct is the question falling for consideration in these appeals. Appellant Company, who is the manufacturer of cement, have availed Cenvat Credit of duty paid on M.S. Rod, Sheets, Channel, Plate and Flat etc., during the period of April, 2009 to November, 2009 and December, 2009 to June, 2010 as capital goods. The Department put the appellant on notice stating that those items are not covered under the definition of "capital goods" in the Cenvat Credit Rules, 2004 to be eligible for availing duty credit. The show cause notices further proposed to recover the credit taken with interest besides invoking penalty under relevant Ss. and rules of Central Excise. The Deputy Commissioner, Central Excise disallowed the credit availed by the appellant as ineligible and demanded the credit to be paid back under Rule 14 of Cenvat Credit Rules, 2004 read with Sec. 11A of the Central Excise Act, 1944. The lower authority had also demanded interest under Rule 14 of Cenvat Credit Rules, 2004 read with Sec. 11AB of the Central Excise Act, 1944 besides imposing penalty under Rule 15(1) of the Cenvat Credit Rules, 2004 read with Sec. 11AC of the Act.

(2.) The appellant company preferred appeals before the Commissioner of Central Excise, Appeals. The Commissioner has confirmed the demand. As regards the imposition of penalty by the lower authority, the same was set aside. The relevant, portion of the Order of the Appellate Authority dated 25 -1 -2011 in respect of the period from April, 2009 to November, 2009 reads as under:

(3.) The appeal preferred by the appellant before the Appellate Tribunal - CESTAT in Appeal No. E/158/2011 was party allowed by the Order dated 23 -3 -2012 and the appeal in Appeal No. E/183/2012 was dismissed by the order dated 1 -6 -2012. Before the CESTAT, the appellant fairly stated that a major portion of the demand is in relation to the use of steel items of fabrication of supporting structures and the same is payable in view of the decision of the Larger Bench in the case of Vandana Global Ltd. v/s. Commissioner - : 2010 (253) E.L.T. 440 (Tri. -LB). In so far as the portion of demand amounting to Rs. 32,668/ - which relates to fabrication of machinery items, appellant requested that the matter be remanded to the original authority for allowing Cenvat Credit subject to verification. In view of the submission made by the appellant, CESTAT confirmed the demand of Rs. 1,11,721/ - which relates to the use of the impugned steel items in the fabrication of supporting structures. As regards the balance amount of Rs. 32,668/ -, the matter was remanded to the lower authority for allowing credit on use of the impugned steel items in the manufacture of machinery, subject to verification by the original authority. The Tribunal directed the lower authority to pass a fresh order after giving opportunity of hearing to the appellant. Insofar as the appeal in Appeal No. E/183/2012, the Tribunal dismissed the same holding that the impugned goods were not used for manufacturing any machinery items but for fabrication and erection and hence the impugned order does not call for interference.