2017 (10) TMI 1033 - AT - Central Excise

CENVAT credit - capital goods and inputs used in captive mines - Held that - the Hon ble Supreme Court of India in their ruling in the case of Vikram Cement v/s Commissioner of Central Excise, Indore 2006 (1) TMI 130 - SUPREME COURT OF INDIA have overruled their ruling in the case of J.K. Udaipur Udyog Ltd. 2004 (9) TMI 101 - SUPREME COURT OF INDIA and held that The schemes of Modvat and Cenvat credit are not different - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availment of Cenvat Credit on inputs and capital goods used in mines
- Interpretation of conflicting judgments by the Hon'ble Supreme Court
- Validity of Order-in-Appeal disallowing Cenvat Credit

Analysis:
1. Availment of Cenvat Credit on inputs and capital goods used in mines:
The appellant, a manufacturer of Aluminium and its products with mines in Jharkhand and Madhya Pradesh, availed Cenvat Credit on duty paid for capital goods and inputs used in the mines. The Revenue alleged contravention of the Cenvat Credit Rules, 2004, and issued a show cause notice proposing to deny Cenvat Credit of ?13,85,919. The Original Authority upheld the denial despite the appellant's reliance on the judgment in the case of M/s Vikram Cement. The Commissioner (Appeals) also disallowed the appeal, leading to the appellant approaching the Tribunal.

2. Interpretation of conflicting judgments by the Hon'ble Supreme Court:
The appellant argued that the judgment in the case of M/s Vikram Cement overruled the ruling in the case of J.K. Udaipur Udyog Ltd., which was relied upon by the Commissioner (Appeals). The Tribunal, after considering the rival contentions and examining the ruling in the case of Vikram Cement, concluded that the judgment in J.K. Udaipur Udyog Ltd. was overruled by the Hon'ble Supreme Court in the case of Vikram Cement. Therefore, the Tribunal held that the Order-in-Appeal disallowing the Cenvat Credit was bad in law and set it aside, along with the Order-in-Original dated 18.10.2010.

3. Validity of Order-in-Appeal disallowing Cenvat Credit:
The Tribunal, presided over by Mr. Anil G. Shakkarwar, Member (Technical), found that the impugned Order-in-Appeal was not legally sustainable due to the overruling of the judgment in the case of J.K. Udaipur Udyog Ltd. by the subsequent ruling in the case of Vikram Cement. Consequently, the Tribunal allowed the appeal of the appellant, entitling them to consequential relief as per law. The decision was dictated and pronounced in court, bringing the matter to a close.