2013 (2) TMI 724 - HC - Central Excise

CENVAT credit - M.S. Rod, Sheets, M.S. Channel, M.S. Plate, Flats etc. - denial on the ground that the items are not covered under the definition of capital goods in the CCR, 2004 - Held that - there is no factual finding as to the nature of use of MS steel rods, MS channel and steel plates and the matter has to be reconsidered by the Tribunal in the Light of decision or the Honourable Supreme Court in Commissioner of Central Excise, Jaipur v. Rajasthan Spinning and Weaving Mill. Ltd. 2010 (7) TMI 12 - SUPREME COURT OF INDIA - the Tribunal has to give finding with regard to the materials used by the appellant and whether the appellant is eligible to avail Cenvat credit - appeal allowed by way of remand.

Issues:
1. Disallowance of Cenvat credit on certain materials.
2. Eligibility of materials for availing duty credit.
3. Imposition of penalty under relevant sections and rules.
4. Appeal before the Commissioner of Central Excise, Appeals.
5. Appeal before the Appellate Tribunal - CESTAT.
6. Consideration of relevant legal precedents.
7. Reconsideration of the matter by the Tribunal.

Issue 1: Disallowance of Cenvat credit on certain materials:
The appellant, a cement manufacturer, availed Cenvat Credit on M.S. Rod, Sheets, Channel, Plate, and Flat as capital goods. The Department contended that these items did not qualify as "capital goods" under the Cenvat Credit Rules, 2004. Consequently, the Deputy Commissioner disallowed the credit and demanded repayment under relevant rules.

Issue 2: Eligibility of materials for availing duty credit:
The Commissioner of Central Excise, Appeals confirmed the demand for repayment of the credit availed by the appellant. The Appellate Authority upheld the disallowance of credit on the mentioned materials as capital goods, citing previous orders and decisions by the CESTAT.

Issue 3: Imposition of penalty under relevant sections and rules:
While the penalty imposed by the lower authority was set aside by the Appellate Authority, the demand for repayment of credit with interest was upheld based on the CESTAT's decision. The appellant's appeals before the CESTAT resulted in partial allowance and remand for verification of specific amounts related to the use of steel items.

Issue 4: Appeal before the Commissioner of Central Excise, Appeals:
The appellant's appeals before the Commissioner were unsuccessful, leading to the confirmation of the demand for repayment of the credit availed on the disputed materials.

Issue 5: Appeal before the Appellate Tribunal - CESTAT:
The CESTAT partially allowed one appeal and dismissed another, considering the nature of use of the steel items by the appellant. The Tribunal directed a fresh order for verification and remanded the matter for further consideration.

Issue 6: Consideration of relevant legal precedents:
The appellant sought reconsideration based on the decision of the Supreme Court and previous cases, arguing for a remittance to the CESTAT for a fresh review in light of legal precedents.

Issue 7: Reconsideration of the matter by the Tribunal:
The High Court noted that the CESTAT did not consider certain legal precedents and lacked factual findings on the nature of use of the steel items by the appellant. Consequently, the High Court set aside the CESTAT orders and remitted the matters back for fresh consideration in line with relevant legal decisions.

This detailed summary of the judgment provides a comprehensive analysis of the issues involved, the legal arguments presented, and the decisions rendered at each stage of the legal proceedings.

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