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2017 (7) TMI 1143 - AT - Central ExciseCENVAT credit - certain steel products as capital goods - welding electrodes - principles of natural justice denied - Held that - The lower authority have not given consideration to the alteration in the eligibility for entitlement for CENVAT credit of capital goods with effect from July 2009 in relation to the particular claim to the appellant. This requires a re-examination to facilitate which, the impugned order is set aside and the matter referred back to the original authority for a re-determination - appeal allowed by way of remand.
Issues: Disallowance of CENVAT credit, interest, and penalty under CENVAT Credit Rules, 2004 and Central Excise Act, 1944
In the present case, the appellant, a manufacturer of 'oxalic acid' and 'sodium nitrite,' challenged the disallowance of CENVAT credit amounting to ?2,17,785/-, along with interest and a penalty under rule 15 of the CENVAT Credit Rules, 2004, read with section 11AC of the Central Excise Act, 1944. The appellant contended that the first appellate authority did not properly consider their submissions and dismissed the appeal due to non-compliance with the direction to pre-deposit the entire amount along with interest. The main issue revolved around the admissibility of CENVAT credit on certain steel products as capital goods, duty paid on welding machines, and welding electrodes. The appellant argued that they were eligible for availing CENVAT credit until before the amendment to the CENVAT Credit Rules, 2004, which came into effect on 7th July 2009. However, the first appellate authority rejected this argument and relied on the decision of the Tribunal in Vandana Global Ltd. v. Commissioner of Central Excise, Raipur, to conclude that introducing a new ground not raised before the lower authority was impermissible. The appellant's Authorized Representative cited the decision of the Bombay High Court in Bharti Airtel v. Commissioner of Central Excise, Pune, to support their case. Upon reviewing the submissions of both parties, it was observed that the lower authority failed to consider the change in eligibility criteria for CENVAT credit on capital goods post the July 2009 amendment concerning the specific claim made by the appellant. Consequently, the impugned order was set aside, and the matter was remanded back to the original authority for a re-determination. This decision was pronounced in court by the Member (Technical) of the Appellate Tribunal CESTAT Mumbai.
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