2018 (1) TMI 521 - AT - Central Excise

CENVAT credit - Cement - rejection on the ground that cement is no way required or connected either directly or indirectly in the manufacture of lead, zinc or sulphuric acid, in the factory of the appellant - Held that - in an entirely identical set of facts, in the case of the appellant itself, M/s Hindustan Zinc Ltd Versus Commissioner of Central Excise And Service Tax, Jaipur 2015 (10) TMI 1558 - CESTAT NEW DELHI , this Tribunal has allowed cenvat benefit on cement, holding that use of cement for stabilization of hazardous waste jarosite as toxic effluent at secured landfill is part and parcel of their manufacturing activity - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Disallowance of cenvat credit on cement
- Imposition of penalty on the appellant

Analysis:
1. The appeal was filed against the order disallowing cenvat credit of &8377; 63,24,218/- and imposing a penalty of &8377; 6 lacs on the appellant by the Commissioner of Central Excise, Customs, and Service Tax, Udaipur. The denial of cenvat credit was based on the assertion that cement was not required or connected to the manufacture of lead, zinc, or sulphuric acid in the appellant's factory.

2. The appellant, engaged in the manufacture of lead and zinc, availed cenvat credit on Central Excise duty paid on cement during the disputed period. The Department contended that the use of cement for treating hazardous industrial waste generated during Zinc smelting operations did not have a direct relation to the manufacturing process. The Department argued that the use of cement for waste treatment could not be considered part of the manufacturing activity, leading to the disallowance of cenvat credit and confirmation of the adjudged demand against the appellant.

3. The appellant's advocate referred to a previous decision of the Tribunal in a similar case involving the appellant, asserting that the issue in the present dispute had already been settled by the Tribunal's earlier ruling.

4. After hearing both parties and examining the case records, the Tribunal noted that in a previous case involving the same appellant, cenvat benefit on cement was allowed by the Tribunal. The use of cement for stabilizing hazardous waste as part of the manufacturing activity was considered justified. The Tribunal also referenced its earlier decisions where similar rulings were made in favor of the appellant based on the use of cement for waste treatment.

5. Based on the settled legal position and precedents, the Tribunal found no merit in the impugned order that denied cenvat benefit to the appellant. Consequently, the Tribunal set aside the order and allowed the appeal in favor of the appellant. The decision was pronounced in open court, granting relief to the appellant in the matter of cenvat credit disallowance and penalty imposition.