2018 (11) TMI 817 - AT - Central Excise

CENVAT Credit - iron and steel raw materials and cement given to M/s. CECL for execution of civil contract relating to clinker silos project - Rule 15(1) of the CENVAT Credit Rules, 2004 - Held that - The issue is squarely covered by various recent decisions in the case of M/s. Chettinadu Cement Corporation Ltd. Vs. C.C.E, L.T.U., Chennai 2016 (12) TMI 218 - CESTAT, CHENNAI , wherein the Tribunal has, after considering the rival contentions, remanded the matter to the adjudicating authority for de novo consideration. Matter remanded to the file of adjudicating authority for de novo consideration in the light of the direction in the case of M/s. Chettinadu Cement Corporation Ltd. - appeal allowed by way of remand.

Summary

Issues:
CENVAT Credit availed for iron and steel raw materials and cement used in civil construction work - Disallowance of CENVAT Credit - Penalty under Rule 15(1) of CENVAT Credit Rules, 2004.

Analysis:
The appellants, engaged in manufacturing cement, availed CENVAT Credit for iron, steel raw materials, and cement supplied for the civil construction of clinker silos. The appellants entered into an agreement with a contractor for the construction work. The contractor opted to pay a compounded rate of works contract service tax. The appellants availed input credit after due intimation to authorities. Despite incorporating details in their CENVAT Credit account and monthly returns, a Show Cause Notice was issued proposing recovery of the CENVAT Credit amount. The Joint Commissioner confirmed the proposal and imposed a penalty under Rule 15(1) of the CENVAT Credit Rules, 2004. The appellants' appeal to the Commissioner of Central Excise (Appeals) was rejected, leading to the current appeal.

During the hearing, the appellant's consultant cited various recent decisions, including those of the CESTAT Bench in the appellant's case and other relevant judgments. The consultant highlighted that similar cases were remanded for de novo consideration. Citing precedents and a judgment of the jurisdictional High Court, the consultant argued for a similar remand in this case. Following the precedent and directions in previous cases, the Tribunal remanded the matter to the adjudicating authority for fresh consideration. The impugned order was set aside, and penalties imposed were also annulled. The appeal was allowed by way of remand, following the principles established in previous judgments.

In conclusion, the Tribunal remanded the matter for fresh consideration in line with previous decisions, setting aside the impugned order and penalties imposed. The appeal was allowed by way of remand, providing the appellants with a fair opportunity to present their case before the adjudicating authority. The judgment emphasized the importance of following established legal precedents and granting a reasonable opportunity for hearing in such matters.