2019 (1) TMI 1028 - AT - Central Excise

CENVAT Credit - input - iron scrap generated at the appellant s end as job workers for M/s. BHEL, Tiruchirapalli - M/s. BHEL, Tiruchirapalli, have paid excise duty on the entire quantity of scrap generated by the appellant - Held that - What is important is that the generated waste and scrap should suffer from excise duty, as applicable. That in this case, it is not disputed that M/s. BHEL, Tiruchirapalli, have paid excise duty on the entire quantity of scrap generated by the appellant. It is also not disputed that they have taken the Credit only based on such invoices - The matter is fully covered by the decision in M/s. Dynamic Dish India Ltd. 2013 (10) TMI 943 - CESTAT BANGALORE - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Denial of CENVAT Credit on iron scrap generated as job workers for M/s. BHEL, Tiruchirapalli.

Analysis:
The dispute in this case revolves around the denial of CENVAT Credit on iron scrap generated by the appellant as job workers for M/s. BHEL, Tiruchirapalli. The proceedings were initiated against the appellant based on the allegation that they did not claim the CENVAT Credit immediately upon receiving the inputs but only after receiving invoices from M/s. BHEL during March 2009 for the period from April 2007 to February 2009. The Original Authority confirmed the demand proposed in the Show Cause Notice, leading to the appeal before the Commissioner (Appeals), who upheld the lower authority's decision, prompting the current appeal.

During the hearing, the appellant's advocate argued that the crucial aspect is whether the waste and scrap generated should be subject to excise duty, which, in this case, was paid by M/s. BHEL. It was undisputed that the appellant claimed the Credit based on the invoices from M/s. BHEL. The advocate referenced a Tribunal decision in M/s. Dynamic Dish India Ltd. Vs. Commissioner of C.Ex., Hyderabad-IV, highlighting the relevance of excise duty payment on the scrap.

On the contrary, the respondent's representative supported the impugned Order. After hearing both sides and reviewing the facts, the Bench acknowledged the correctness of the appellant's argument, citing the decision in M/s. Dynamic Dish India Ltd. The decision emphasized that the material in question was considered scrap by M/s. BHEL and leftover material by the appellant. It criticized the lack of investigation into the nature of the material and the reliance on disbelief of the assessee's claims without proper verification. Consequently, the Bench concluded that the impugned Order could not be sustained and set it aside, allowing the appeal with consequential benefits as per the law.

In conclusion, the judgment focused on the proper application of CENVAT Credit rules concerning iron scrap generated as job workers. The decision highlighted the importance of excise duty payment on the scrap and criticized the lack of investigation into the nature of the material, emphasizing the need for proper verification before disbelieving the assessee's claims. The judgment ultimately favored the appellant, setting aside the impugned Order and allowing the appeal with consequential benefits.