BIMETAL BEARINGS LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This appeal filed by the assessee is directed against the final order passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, in Final Order No.1174/2010, dated 11.11.2010. This appeal has been admitted vide order dated 01.04.2011 on the following substantial question of law:-

(2.) The short issue which falls for consideration now is whether the assessee was entitled to suo-motu avail credit of central excise duty which they have reversed?

(3.) The asssessee are manufactures of Bimetallic Strips and also copper-based powder which is used within their factory in the manufacture of steel strips. The assessee avail Cenvat Credit on the inputs procured by them and utilize the same for payment of Central Excise Duty on their finished products. In the course of verification of input invoices, it was found that they had procured "Superior Kerosene Oil" (hereafter referred to as "SKO") from M/s.Indian Oil Corporation Limited, Tondiarpet Terminal, Chennai (hereinafter referred to as "IOCL"). The genuineness of the duty payment was verified and a reported was called for from IOCL. On the report being submitted, the department found that IOCL was not a registered dealer for SKO and therefore, not entitled to pass Cenvat Credit for SKO and that IOCL had received the SKO from M/s.Chennai Petroleum Corporation Limited (hereinafter referred to as "CPCL") at nil rate of duty by availing the benefit of Notification No.04/2005-CE, dated 01.02005, under which the consignments have to be cleared only under the Public Distribution Scheme (hereinafter referred to as "PDS"). However, in the instant case, the supplies were made to an Industrial consumer by adopting higher value than the value at which SKO was received from CPCL.