2017 (1) TMI 1122 - AT - Central Excise

CENVAT credit - Shapes & Sections, Sheets, M.S. Plate, M.S. Channels, Beam, M.S. Angle & M.S. Grinder etc. - whether the said items were actually used by the appellant in their plant to fabricate and manufacture the machines - allowance of credit dependent on actual use condition? - Held that - the First Appellate Authority did not have the advantage of going through the evidence which was placed before this Tribunal - the evidence to reflect design, specification of machine, parts thereof, accessories thereof fabricated was not available, now that the evidence including the certificate of Chartered Engineer reported on 31/07/2014 to reflect the design, specification of machines, parts thereof, accessories thereof, fabricated and its description etc. was available, he may examine the issue after giving opportunity to the appellant to present their case - matter on remand. Demand of differential duty - whether exemption under N/N. 67/95-CE dated 01/03/1995 allowed? - Held that - the assessee is paying duty on Core Pipe & taking Cenvat credit of the said duty paid would be the futile exercise and by invoking such exercise exchequer will be not be benefitted - demand set aside. Appeal allowed - decided partly in favor of appellant and part matter on remand.

Summary

Issues:
1. Admissibility of Cenvat credit on various inputs used for fabrication.
2. Demand of differential Central Excise duty on Core Pipes manufactured and consumed within the factory.

Analysis:
1. Admissibility of Cenvat Credit on Various Inputs:
The appellant, M/s Tehri Pulp & Paper Ltd., filed an appeal against Order-in-Appeal No. 171-CE/APPL/MRT-l/2013 related to demands of inadmissible Cenvat credit on specific inputs and differential Central Excise duty on Core Pipes. The appellant argued that the items in question were used for fabrication of machinery in their plant expansion program. The Original Authority initially denied the Cenvat credit based on discrepancies in the appellant's statements regarding the usage of the items. The First Appellate Authority upheld the denial citing lack of evidence reflecting design specifications of machine parts. However, the appellant later presented detailed evidence through a Chartered Engineer's certificate to support their claim. The Tribunal remanded this issue back to the Commissioner (Appeals) for reevaluation based on the new evidence.

2. Demand of Differential Central Excise Duty on Core Pipes:
Regarding the demand of differential duty on Core Pipes, the appellant contended that Core Pipes were manufactured from Kraft Paper within their unit and were sold based on weight, hence incurring duty similar to Kraft Paper. The appellant argued that paying higher duty on Core Pipes and availing Cenvat credit for the same would be redundant. The Tribunal agreed with the appellant, ruling that demanding differential duty on Core Pipes would not benefit the exchequer. Consequently, the Tribunal deemed the demand of ?6,63,442/- unsustainable.

In conclusion, the Tribunal allowed part of the appeal related to the demand of differential duty on Core Pipes and remanded the part concerning the admissibility of Cenvat credit on various inputs back to the Commissioner (Appeals) for further examination based on the newly presented evidence.