2019 (4) TMI 1413 - AT - Central Excise

CENVAT Credit - Process amounting to manufacture - conversation of iron ore into iron ore concentrate - HELD THAT - It has not been disputed by the Department that the duty has been paid by the manufacturer of the goods in pursuance of the judicial pronouncement vide the order of the Ld. Adjudicating Authority and upheld by the Commissioner(Appeal). In the circumstances, there is no infirmity committed by the appellant within the provisions of the Cenvat Credit Rules, 2002-04 by availing such credit. Rule 3(1) of the Cenvat Credit Rules 2002-04, specifically provides that a manufacture/procedure of the final good is entitled to take cenvat credit of excise duty paid on any input/capital goods received in the factory for manufacture of final product. Rule 3(4) of the Cenvat Credit Rule also allow the appellant to utilise the said credit for the payment of Central Excise Duty in respect of dutiable final product manufactured and cleared by the appellant during the impugned period. Hence, there is no irregularity committed by the appellant in the instant case by availing of the Cenvat Credit and also the appellant has availed and utilised the Cenvat Credit as per the law. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Correctness of availment of Cenvat Credit on duty paid on iron ore concentrates by the appellant's supplier.
- Interpretation of whether the conversion of iron ore into iron ore concentrate constitutes "manufacture" within the Central Excise Act.
- Compliance with Cenvat Credit Rules, 2002/2004 regarding the payment of excise duty on input goods.

Analysis:

1. The appeal was filed against two orders-in-Original confirming irregularly availed Cenvat Credit and imposing duty demand, interest, and penalties on the appellant. The issue revolved around the correctness of availing Cenvat Credit on duty paid by the supplier, Tata Steel Ltd., on iron ore concentrates. The Revenue contended that since the conversion of iron ore into concentrate did not amount to "manufacture" under the Act, the duty paid was not eligible for Cenvat Credit.

2. The appellant argued that the Cenvat Credit availed was legal and valid, citing non-compliance with Central Excise Law and procedures in the impugned orders. The appellant claimed that the supplier had paid duty as per the adjudication order, and the appellant had taken Cenvat Credit within the framework of the Cenvat Credit Rules, 2002/2004.

3. The Senior Advocate for the appellant emphasized that the processes undertaken by the supplier TSL did not impact the eligibility of Cenvat Credit, citing relevant case law. The appellant maintained that iron ore concentrates were distinct from iron ore, and the duty paid was valid for availing Cenvat Credit.

4. The Tribunal analyzed the processes undertaken by the supplier and concluded that no new commercial commodity emerged, thus no Central Excise duty was leviable. The appellant's compliance with Cenvat Credit Rules, 2002/2004, was found satisfactory, as the duty on input goods had been paid by the supplier as required by the rules.

5. The Tribunal rejected the Department's contention that the duty paid by the supplier should be treated as a deposit and not eligible for Cenvat Credit, stating it was contrary to the Cenvat Credit Rules, 2002/2004. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

This detailed analysis of the judgment highlights the key arguments, legal interpretations, and conclusions drawn by the Tribunal regarding the issues involved in the case.