2016 (4) TMI 102 - AT - Central Excise

Wrongly availed cenvat credit on inputs/parts under Rule 14 of CCR - denial of credit on MS Channels, MS Angles, MS Plates etc. after the amendment of definition of Rule 2(k) of Cenvat Credit Rules, 2004 - demand appropriated with interest and imposed equivalent penalty - Held that - Both sides have not considered various decisions of the Hon ble Supreme Court and various High Court pronouncements on the issue of credit availed on MS Angles, channels etc. in the cases Commissioner Vs. Jawahar Mills Ltd. (2001 (7) TMI 118 - SUPREME COURT OF INDIA ), CCE, Tiruchirappalli Vs. India Cements Ltd. ( 2013 (1) TMI 5 - Madras High Court ) Accordingly, the appeal is remanded to the adjudicating authority who shall hear the case afresh after examining the ratio laid down in the above judgments and pass appropriate order.

Summary

Issues:
- Denial of credit on MS Channels, MS Angles, MS Plates under Cenvat Credit Rules, 2004.

Analysis:
The appellant, engaged in manufacturing cast articles of Iron and Aluminium for motor vehicles, appealed against the Commissioner (Appeals) order upholding the demand of Rs. 3,07,902/- for wrongly availing credit on excise duty paid on inputs and capital goods. The dispute centered around availing credit for items like Angles, Channels, Bars used in construction within the factory. The Dy. Commissioner confirmed the demand and imposed penalties. The Ld. Counsel argued that the demand period falls under both pre and post 1.4.2011 Rule 2(k) of CCR. Citing a Tribunal order, the appellant sought to set aside the impugned order. On the contrary, the Ld. AR supported the disallowance of credit and penalties imposed.

The core issue revolved around the denial of credit on MS Channels, Angles, Plates post the amendment of Rule 2(k) of Cenvat Credit Rules, 2004. The Member highlighted the failure of both parties to consider various judicial decisions on similar issues, referencing cases like Commissioner Vs. Jawahar Mills Ltd. and others. Considering these precedents, the Member opined that the matter should be remanded to the adjudicating authority for a fresh hearing, emphasizing the need to apply the principles laid down in the mentioned judgments. The appeal was allowed by remand, stressing the appellant's right to be heard in the process.

In conclusion, the judgment addressed the denial of credit on specific items under the Cenvat Credit Rules, emphasizing the importance of considering relevant judicial decisions in such matters. The decision to remand the case underscored the necessity of a thorough examination of legal precedents before reaching a final determination. The appellant's right to a fair hearing was reaffirmed, ensuring a just and comprehensive review of the dispute.