2023 (9) TMI 1277 - AT - Central Excise

CENVAT Credit - iron ore pellets purchased by the appellant - availment of cenvat credit on the iron ore pellets and utilization of such credit for payment of duty on its final product - HELD THAT - Although the appellant has taken cenvat credit on iron ore pellets, it has been held that the product of iron ore pellets is exempted from payment of duty and the said goods were used by the appellant for manufacturing process and the manufactured goods have been sold on payment of duty . Therefore, the demand of duty on such iron ore pellets shall be demanded reversal of cenvat credit as held by this Tribunal in the case of AJINKYA ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III 2013 (6) TMI 610 - CESTAT MUMBAI , which has been affirmed by the Hon ble Bombay High Court in THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES 2012 (7) TMI 141 - BOMBAY HIGH COURT , wherein the Hon ble High Court of Bombay has held in the present case, the assessment on decoiled HR/CR coils cleared from the factory of the assessee on payment of duty has neither been reversed nor it is held that the assessee is entitled to refund of duty paid at the time of clearing the decoiled HR/CR coils. Further, the supplier of the goods has paid the duty on iron ore pellets and the same has been accepted by the respondent, therefore, being a manufacturer of excisable goods, the appellant is entitled to cenvat credit of duty paid by the appellant and it has not been questioned to the supplier of the goods that the product is exempted from payment of duty and the Revenue has accepted the duty payment. In that circumstances, the appellant is entitled to take cenvat credit as held by the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE CUSTOMS VERSUS MDS SWITCHGEAR LTD. 2008 (8) TMI 37 - SUPREME COURT . The appellant has correctly taken the cenvat credit - the impugned order is not sustainable on the eyes of law and the same is set aside - Appeal allowed.

Summary

Issues involved:
The denial of cenvat credit on iron ore pellets purchased by the appellant from a specific supplier, leading to the demand for reversal of cenvat credit, interest, and penalty.

Summary:
The appellant, a manufacturer of sponge iron, purchased duty paid iron ore pellets from a supplier for use in manufacturing. A show-cause notice alleged wrongful cenvat credit availing due to the exemption of iron ore pellets from duty payment. The demand for reversal of cenvat credit was confirmed, prompting the appeal.

The appellant argued that since they used the iron ore pellets in manufacturing and paid duty on the final product, there was no need to reverse cenvat credit. They cited relevant court decisions supporting their position. The Revenue supported the impugned order.

After hearing both parties, it was found that although cenvat credit was taken on exempted iron ore pellets, the goods were used in manufacturing and sold with duty payment. Citing precedent, it was determined that the demand for reversal of cenvat credit was not valid. The appellant was entitled to cenvat credit as the supplier had paid duty on the iron ore pellets.

The Tribunal held that the appellant correctly availed cenvat credit, setting aside the impugned order. The appeal was allowed with any consequential relief.

*(Operative part of the order was pronounced in the open court)*