2015 (1) TMI 801 - HC - Central Excise

CENVAT Credit - Credit availed on waste materials that would subsequently be converted into goods - Held that - Appellate Tribunal is bound to decide the rival facts put forth on either side. But, in the instant case, even though a specific contention has been put forth on the side of the Department to the effect mentioned, the Appellate Tribunal has not at all considered the same. The Appellate Tribunal has simply quoted certain decisions and allowed the appeal and thereby, set aside the orders passed by the Authorities. Since the Appellate Tribunal is also a fact finding authority and since the same has not decided the facts put forth on the side of the Department, this Court is of the view that the impugned order passed by the Appellate Tribunal is not factually and legally sustainable. Under the said circumstances, the matter is liable to be remitted to the file of the Deputy Commissioner of Central Excise (Original Authority), Madurai. Since the matter is liable to be remitted as stated above, the substantial question of law settled on the side of the appellant - Decided in favour of Revenue.

Summary

Issues:
Challenge to Final Order by CESTAT regarding CENVAT credit facilities for waste materials converted into goods.

Analysis:
The judgment involves a challenge to the Final Order passed by the CESTAT regarding the availing of CENVAT credit facilities by a manufacturer of moulded rubber products for waste materials converted into goods. The show cause notice was issued on the grounds that the respondent was not entitled to avail CENVAT credit facilities for such goods. The Order-in-Original upheld this claim, which was further affirmed by the Commissioner of Appeals. The Appellate Tribunal, however, set aside the previous orders. The key issue raised was whether the CESTAT correctly applied the Tribunal Orders' ratio where the facts were distinct from the instant case.

The appellant contended that the respondent converted scrap materials and waste goods into finished goods, making them ineligible for CENVAT credit facilities. The Appellate Tribunal's decision was criticized for not discussing this specific contention and merely following certain decisions. On the other hand, the respondent argued that the Appellate Tribunal rightly allowed the appeal after considering previous proceedings and orders. The High Court noted that the Tribunal should have addressed the specific contention raised by the Department regarding the conversion of waste materials into goods. Since the Tribunal did not adequately consider this crucial aspect, the Court found the Tribunal's order legally unsustainable. Consequently, the matter was remitted to the Deputy Commissioner of Central Excise for a fresh decision.

In conclusion, the Civil Miscellaneous Appeal was allowed without costs, setting aside the orders by the CESTAT and other authorities. The case was remitted to the Deputy Commissioner of Central Excise in Madurai for a reevaluation of the rival facts presented by both parties and to issue appropriate orders based on a comprehensive assessment of the matter.