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2019 (6) TMI 505 - AT - Central ExciseCENVAT Credit - inputs - TMT cutting, MRM Roll Spoils and end cutting - Department took the view that goods classifiable under 7204 are in the nature of melting scrap etc. which are meant for melting in furnace. The Department further held that scrap of this nature cannot be used by the appellant for manufacture of MS Flats, Bars etc. - HELD THAT - The inputs received by the appellant for use in the manufacture of rolled products have been classified by the supplier under 7204.It is asserted on behalf of the appellant that such goods are capable of being used in the factory for the manufacture of rolled products and hence the credit is admissible. When it is so, without going into the issue of classification, we hold that the appellant is entitled to avail CENVAT Credit in accordance with the Cenvat Credit Rules - Appeal allowed - decided in favor of appellant.
Issues:
- Classification of goods under Chapter Heading 7204 for availing CENVAT Credit - Denial of CENVAT Credit on goods procured for manufacturing rolled products - Applicability of earlier Tribunal decision on similar issue Classification of goods under Chapter Heading 7204 for availing CENVAT Credit: The appellant procured goods described as TMT cutting, MRM Roll Spoils, and end cutting for manufacturing M.S. Flat/Bar, M.S. Angle, M.S. Channel, M.S. Round, claiming CENVAT Credit on the purchase invoices. The Department contended that goods classifiable under 7204 as melting scrap for furnaces cannot be used for manufacturing rolled products like M.S. Flats, Bars, etc. The CENVAT Credit availed on these goods was proposed to be denied through a Show Cause Notice. The impugned order disallowed the CENVAT Credit amounting to ?1,36,01979/- along with interest and imposed a penalty equal to the disallowed credit. Denial of CENVAT Credit on goods procured for manufacturing rolled products: The appellant argued that the goods procured from the supplier under Chapter Heading 7204 were capable of re-rolling at their factory for manufacturing rolled products. The appellant's consultant cited a previous Tribunal decision in their favor for a similar issue, emphasizing that the goods were suitable for re-rolling in their factory. The Revenue justified the impugned order, but the Tribunal noted that a previous decision favored the appellant, allowing CENVAT Credit on similar goods for the earlier period. The Tribunal held that if duty was paid on the final product and accepted by the Department, the appellant is entitled to CENVAT Credit on inputs. Applicability of earlier Tribunal decision on similar issue: The Tribunal referred to a previous decision where the issue of mis-rolls being classified as waste and scrap or semi-finished products was discussed. The decision clarified that mis-rolls, though emerging during the manufacture of rods and bars, were solid sections in semi-finished form directly used for re-rolling in smaller hot re-rolling mills. The mis-rolls were classified under heading 7207.90 as semi-finished products. Based on this clarification and the appellant's classification of the item under heading 7207.90, the Tribunal upheld the classification and allowed the appeal, stating that the appellant is entitled to avail CENVAT Credit in accordance with the CENVAT Credit Rules. This detailed analysis of the judgment addresses the issues of classification under Chapter Heading 7204, denial of CENVAT Credit on goods procured for manufacturing rolled products, and the applicability of a previous Tribunal decision on a similar issue, providing a comprehensive understanding of the case.
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