2016 (11) TMI 1097 - AT - Central Excise

CENVAT credit - structural steel used in the manufacture of final products cleared on payment of duty - rail, railway track materials and JO trucks - whether the appellants are eligible for the credit on duty paid on beams, columns, structures, fabricated columns used as inputs for manufacture of structures and cranes, which were removed on payment of appropriate duty? - the appellants could not produce relevant details with supporting documents in support of their claim for availment of cenvat credit - Held that - Considering the detailed documents submitted by the appellant regarding duty paid clearances of the goods manufactured /fabricated in their factory using these M.S. Items and also the Department s view taken in the order mentioned above in the appellant s own case for the subsequent period, we find no justification for denial of credit on these items in the impugned orders. Regarding cenvat credit on rails, MBC concrete sleepers used in railway line, as mentioned above, the credit has been allowed to the appellant in subsequent orders. Reference can also be made to the order dated 25.02.2010 of the Commissioner (Appeals) in the appellant s own case, where credit has been allowed on railway, MBC concrete sleepers as inputs. Similarly, credit has been allowed on beams, angles, columns and rails used in the manufacture of capital goods, which are cleared on payment of duty. Admissibility of credit on JO trucks - Held that - admittedly, the said trucks were used for transportation of raw materials within the factory premises. We have perused the technical write up and photographs of the said JO trucks. These are four wheeled industrial platform truck for horizontal movement of heavy material upto 2 MTs. These are basically material handling equipments operated within the premises of the factory. We note that the credit on such JO truck has been allowed by the Tribunal in the appellant s own case vide Final Order No.51754/2016 dated 5.5.2016. The said order also allowed cenvat credit in respect of railway track materials following the decision in the appellant s own case vide Final Order No.52840 of 2015 dated 9.9.2015. For JO trucks, reliance was placed on earlier decision in the appellant s own case vide Final Order No.52994 of 2015 dated 8.3.2015. The matter of eligibility of credit on various iron and steel items, railway track material, JO truck were subject of many earlier proceedings and the appellants have orders from the Tribunal admitting their eligibility. Considering these settled issues in favour of the appellant, we find that the impugned orders cannot be sustained. Accordingly, the impugned orders are set aside and the appeals are allowed.

Summary

Issues:
- Eligibility of cenvat credit on structural steel, rail, railway track materials, and JO trucks used in the manufacture of final products cleared on payment of duty.

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI involved two appeals dealing with similar issues but covering different periods. The appellants, engaged in manufacturing sponge iron used in the production of bloom/billets, questioned the denial of cenvat credit on various items by the Original Authority. The main contention was the eligibility of cenvat credit on structural steel, rail, railway track materials, and JO trucks used in the manufacturing process. The consultant for the appellants argued that the items in question were rightly eligible for credit, citing previous decisions in the appellant's own case by different authorities. The consultant emphasized that the department had taken inconsistent views, and reliance was placed on legal precedents to support the appellant's claim.

Regarding the eligibility of cenvat credit on duty paid items used in the manufacture of structures and cranes, the Original Authority had denied credit due to lack of supporting documents. However, the appellants provided detailed documentation, including production reports, stock accounts, and clearances of final products on payment of duty, to substantiate their claim. The Commissioner in a previous order had allowed credit on steel items used in crane manufacturing and beam welding units, supporting the appellant's position. Similarly, credit was allowed on railway track materials and JO trucks, which were considered material handling equipment used within the factory premises.

The Tribunal analyzed the documents submitted by the appellant and the decisions in their favor in previous cases. It found no justification for the denial of credit on the items in question, as the appellant had adequately demonstrated the usage and clearance of final products on payment of duty. The Tribunal also noted that credit had been allowed on similar items in subsequent orders, reinforcing the appellant's eligibility for cenvat credit. Ultimately, the Tribunal set aside the impugned orders and allowed the appeals based on the settled issues in favor of the appellant.

In conclusion, the judgment highlighted the importance of supporting documentation and consistency in decision-making by the department. It emphasized the need for clear justification when denying cenvat credit and upheld the appellant's eligibility based on previous orders and legal principles.