2018 (3) TMI 1773 - AT - Central Excise

CENVAT Credit - input - MS Flat /Bar, MS Angle, MS Channel etc. - HELD THAT - When on final product duty was paid and accepted by the Departmetn then appellant is entitled for cenvat credit on input as per the ratio laid down in the decision of the Tribunal in JAI RAJ ISPAT LTD. VERSUS COMMISSIONER OF C. EX., HYDERABAD-IV 2006 (7) TMI 210 - SUPREME COURT - the appellant is entitled to avail cenvat credit in accordance with the Cenvat Credit Rules - Appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of cenvat credit for manufacturing inputs

Analysis:
The appellant, engaged in manufacturing various products, filed an appeal against the denial of cenvat credit by the Department. The appellant argued that there is no provision in the Cenvat Credit Rules to deny eligibility for cenvat credit if the goods have been received, utilized for manufacturing excisable products, and duty has been paid. The Department contended that the goods were classified by the supplier for melting purposes, which the appellant disputed, stating they do not have a melting furnace.

Legal Precedent:
The Tribunal referred to a decision in Jai Raj Ispat Ltd. vs. Commr. Of C.Ex., Hyderabad-IV [2006(200) ELT 518(SC)], where the issue of 'mis-rolls' was discussed. The Revenue argued that 'mis-rolls' are semi-finished products, while the appellants claimed they should be considered waste and scrap. The Board's Circular No. 27/89 clarified the classification of such items under heading No. 7204 or 7207.90 based on their use for re-melting or re-rolling. The adjudicating authority classified 'mis-rolls' under heading No. 7207.90 as semi-finished products, a decision upheld by the Tribunal.

Judgment:
The Tribunal held that if duty was paid on the final product and accepted by the Department, the appellant is entitled to cenvat credit on inputs. Without delving into the issue of classification, the Tribunal ruled in favor of the appellant, allowing the appeal and setting aside the impugned order. The decision was based on the entitlement of the appellant to avail cenvat credit in accordance with the Cenvat Credit Rules.