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2017 (9) TMI 73 - AT - Central ExciseCENVAT credit - rails - concrete sleeper - Check Rail - Fish Plates - Held that - the issue is covered by the Hon ble Supreme Court decision in the case of Jayaswal Neco Ltd. v/s CCE Raipur 2015 (4) TMI 569 - SUPREME COURT , where it was held that it is apparent that the use of railway tracks is related to the actual production of goods and without the use of the said railway track, commercial production would be inexpedient, credit is allowed - demand set aside. Demand of interest on late reversal of credit - scope of SCN - appellant holds that the subject matter was not in appeal before Commissioner (Appeal). Therefore, the finding given by the impugned order in this regard is beyond scope of the department s appeal before Commissioner (Appeals) - Held that - When the department has not raised the issue of charging interest on late reversal of credit in the appeal filed before Commissioner Appeals, the assessee also did not get the opportunity to defend and put up their view point on the same - The Tribunal s decision in case of CCE Mumbai V/s Echay Forging Pvt. Ltd. 2014 (8) TMI 322 - CESTAT MUMBAI also supports this stand holding that when there is no challenge to the finding of lower authority before the appellate authority, finding of the lower authority is to be upheld - demand of interest set aside. CENVAT credit on Roof Truss and Roof Girder - The appellant has withdrawn credit claim for Cenvat credit amounting to ₹ 72,295/- in respect of Roof Truss and Roof Girder, and therefore, they have reversed the said credit along with interest. Consequently the impugned order in this regard is sustained - demand upheld. Appeal allowed - decided partly in favor of appellant.
Issues Involved:
1. Disallowance of Cenvat Credit on Rails and Concrete Sleepers. 2. Disallowance of Cenvat Credit on Roof Truss and Roof Girder. 3. Demand of Interest on Reversal of Cenvat Credit. Issue-wise Detailed Analysis: 1. Disallowance of Cenvat Credit on Rails and Concrete Sleepers: The appellant, M/s Jindal Steel & Power Ltd., contested the disallowance of Cenvat Credit amounting to ?2,58,570/- on items such as rails and concrete sleepers. The tribunal referred to the Hon'ble Supreme Court's decision in Jayaswal Neco Ltd. v/s CCE Raipur - 2015 (319) ELT 247 (S.C.), which clarified that machines, machinery, plants, equipment, etc., used for producing or processing any goods qualify as 'capital goods' and are eligible for Modvat credit. The court emphasized that if a process is integrally connected with the ultimate production of goods, the goods required for that process fall within the expression "in the manufacture of goods." The tribunal noted that the appellant used railway tracks within the plant for transporting hot metal and handling raw materials, which is integral to the manufacturing process. Therefore, the appellant is entitled to Cenvat credit on these items, and the impugned order disallowing the credit was set aside. 2. Disallowance of Cenvat Credit on Roof Truss and Roof Girder: The appellant withdrew their claim for Cenvat credit amounting to ?72,295/- on Roof Truss and Roof Girder and reversed the said credit along with interest. Consequently, the tribunal sustained the impugned order regarding this disallowance. 3. Demand of Interest on Reversal of Cenvat Credit: The appellant argued that the demand for interest on the late reversal of credit amounting to ?2,97,073/- was beyond the scope of the department's appeal before the Commissioner (Appeals). The tribunal noted that the issue of charging interest was not raised by the department in the appeal before the Commissioner (Appeals), and thus, the appellant did not have the opportunity to defend their position. Citing the Tribunal’s decision in CCE Mumbai V/s Echay Forging Pvt. Ltd. - 2015 (319) ELT 127 (Tri-Mum), the tribunal held that when there is no challenge to the finding of the lower authority, the finding must be upheld. Therefore, the impugned order sustaining the demand for interest was set aside. Conclusion: The impugned order was modified to reflect the tribunal's findings: the appellant is entitled to Cenvat credit of ?2,58,570/- on rails and concrete sleepers, the disallowance of credit on Roof Truss and Roof Girder was sustained, and the demand for interest on the late reversal of Cenvat credit was set aside. The appeal was allowed in these terms.
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