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2023 (8) TMI 314 - AT - Central ExciseReversal of CENVAT Credit - input or not - Electrode Carbon Paste - Electrode Carbon Paste is used inside the furnace - contention is that the same is in the nature of consumable and gets consumed during the course of the manufacturing process - HELD THAT - In appellant s own case M/S SOVA ISPAT ALLOYS (MEGA PROJECTS) LTD. VERSUS COMMISSIONER OF CGST EXCISE, BOLPUR 2023 (4) TMI 1130 - CESTAT KOLKATA , this Tribunal has observed that electrode carbon paste used and consumed in the process of manufacture of ferro alloys is an input eligible for cenvat credit under Rule 2 (k) of the Cenvat Credit Rules, 2004. As the issue has already been settled in favour of the appellant in their own case for the subsequent period, therefore, the appellant has correctly taken Cenvat credit on Electrode Carbon Paste, which gets consumed during the course of manufacturing process. The impugned order is set aside - appeal allowed.
Issues involved:
The issue involved in this case is whether the Electrode Carbon Paste used in the manufacturing process of ferro alloys should be considered as a consumable input eligible for Cenvat credit under Rule 2(k) of the Cenvat Credit Rules, 2004, or as capital goods under Rule 2(a) of the same Rules. Details of the Judgment: Issue 1 - Nature of Electrode Carbon Paste: The appellant, engaged in manufacturing ferro alloys, used Electrode Carbon Paste in the furnace during the manufacturing process. They argued that the paste is consumed during manufacturing and is contained in the finished goods, making it an input eligible for Cenvat credit under Rule 2(k) of the Cenvat Credit Rules, 2004. Issue 2 - Revenue's Contention: The revenue contended that Electrode Carbon Paste should be considered as capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004. A demand was raised against the appellant for availing Cenvat credit on the paste for the period December 2005-06 to 2009-10, invoking an extended period of limitation. Issue 3 - Tribunal's Observations: The Tribunal noted that in a previous case involving the appellant, it was established that Electrode Carbon Paste is a consumable input essential for manufacturing ferro alloys. The Tribunal referred to various precedents and held that the paste, being consumed in the manufacturing process, qualifies as a consumable input eligible for Cenvat credit. Issue 4 - Precedents and Judicial Pronouncements: The Tribunal cited judgments by the Hon'ble Calcutta High Court and previous decisions by the Tribunal itself, supporting the view that items like Electrode Carbon Paste, when consumed in the manufacturing process, should be considered as consumable inputs eligible for credit. Issue 5 - Decision of the Tribunal: Based on the precedents and the nature of Electrode Carbon Paste being consumed during manufacturing, the Tribunal concluded that the paste is an input eligible for Cenvat credit under Rule 2(k) of the Cenvat Credit Rules, 2004. The impugned order was set aside, and the appeal was allowed in favor of the appellant. Separate Judgment by the Judges: No separate judgment was delivered by the judges in this case. This judgment by the Appellate Tribunal CESTAT Kolkata clarified the classification of Electrode Carbon Paste as a consumable input eligible for Cenvat credit, based on its consumption in the manufacturing process of ferro alloys. The decision was in favor of the appellant, overturning the revenue's contention that the paste should be treated as capital goods.
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