2013 (11) TMI 745 - AT - Central Excise

Denial of CENVAT Credit on the input service i.e. Goods Transport Agency service Waiver of Pre-deposit of duty and penalty under Rule 15 of cenvat credit rule r.w. Section 11AC of central excise act, 1944 - Held that - Relying upon Commissioner of Central Excise, Chandigarh-I vs. Punjab Steels 2010 (7) TMI 252 - PUNJAB AND HARYANA HIGH COURT The Commissioner should examine the entire issue afresh and record a categorical finding on the basis of evidences/records that would be produced by the Appellant before him - Since the case in relation to the major portion of the demand of Rs.2.45 Crores remitted, the other issue also needs to be remanded to the Ld. Commissioner who would examine the eligibility of CENVAT Credit availed on GTA Services, for bringing the inputs inside the factory which were later cleared, as such, without reversal of proportionate CENVAT Credit on such input service - The applicant directed to deposit an amount of Rs. 20.00 Lakhs as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted Clearance of Manganese Ore from factory without reversal of SAD - Held that - The Manganese Ore had been cleared from the mixed stock of imported as well as indigenous goods were only imported Manganese Ore - It is the claim of the Appellant that even though these were imported as well as indigenous stock, and stocked together, however, they could establish from the records maintained by them that during the relevant period they have only cleared Manganese Ore procured indigenously and not cleared the Manganese Ore imported by them on which SAD has been paid - The records produced by the Appellant, to some extent show that the Appellant have cleared Manganese Ore from their indigenous stock only - the quantity of 16952.665 M.T. though pertains to the period prior to import of the Manganese Ore, but wrongly included in the demand. - matter remanded back.

Summary

Issues:
- Waiver of pre-deposit of duty and penalty under Rule 15 of CENVAT Credit Rules read with Section 11AC of Central Excise Act, 1944.
- Denial of CENVAT Credit on GTA service.
- Demand related to failure to reverse CENVAT Credit on imported Manganese Ore.
- Examination of evidence and records regarding clearance of Manganese Ore.
- Remand of the case for fresh adjudication by the Commissioner.

Analysis:

The case involved an application seeking waiver of pre-deposit of duty and penalty amounting to Rs.3.41 Crores under the CENVAT Credit Rules and the Central Excise Act, 1944. The demand comprised two components: denial of CENVAT Credit on GTA service and failure to reverse CENVAT Credit on imported Manganese Ore. The appellant, engaged in manufacturing finished goods, argued that they had only cleared indigenous Manganese Ore and not the imported one. The Ld. Advocate highlighted discrepancies in the demand and offered to deposit Rs. 20.00 Lakhs as a fair gesture.

Regarding the demand related to imported Manganese Ore, the Ld. A.R. for the Revenue contended that the appellant failed to prove that only indigenous Manganese Ore was cleared, as the stock levels indicated otherwise. However, no specific finding was recorded by the Ld. Commissioner on this matter. The Tribunal found merit in the appellant's claim based on the records presented, indicating clearance of Manganese Ore from indigenous stock only. The case was remanded to the Commissioner for a fresh examination of evidence and a specific finding on the clearance of Manganese Ore, considering all records.

The Tribunal decided to remand the case for fresh adjudication by the Commissioner on both issues: denial of CENVAT Credit on GTA service and failure to reverse CENVAT Credit on imported Manganese Ore. The Commissioner was directed to examine the entire matter afresh, considering all evidence and records presented. The appellant was instructed to deposit Rs. 20.00 Lakhs within eight weeks and comply directly with the Adjudicating authority. The Commissioner was required to grant a reasonable opportunity for hearing before deciding the issues again. The impugned order was set aside, and the appeal was allowed by way of remand, with the stay petition being disposed of accordingly.