9911796707
TMI Blog2023 (6) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... because there was no issue of Sponge Iron on the day of visit of the officers, it cannot be concluded that the Appellant has not used it at all in the manufacturing of Pig Iron. It is a fact that Sponge Iron is not must for manufacturing Pig Iron. The Appellant stated that they have used it as a trial basis only to reduce the usage of Coke - the statement of Usha Martin (another Conversant Agent of TISCO) also agrees that the usage of Sponge Iron reduces the use of Coke. Since it is not an essential major input in the manufacturing of Pig Iron, we agree with the submission of the Appellant that on the basis of one day verification by the officers, it cannot be concluded that the Appellant has never used Sponge Iron in the manufacture of Pig Iron. The officers found from the Costing Sheet, the cost of Sponge Iron was not taken into consideration - HELD THAT:- Appellant contended that the costing has no relevance to conclude whether Sponge Iron is an input or not and to decide the eligibility of availment of Cenvat credit- the Contention of the Appellant agreed upon, that on the basis of costing it cannot be decided whether the Appellant is eligible for Cenvat credit or not, si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Per : K. ANPAZHAKAN : The facts of the case in brief are that the Appellant company was engaged in the manufacture of Pig Iron. The Appellant stated that they installed a Mini Blast Furnace designed on new technology for low investment and high potentiality and adaptability and it was different from Blast Furnace of other manufacturers. For manufacturing Pig Iron, the appellant was using Iron Ore, Sponge Iron, Nut Coke, Lime Stone, Dolomite, L.D. Slag etc. The appellant was availing credit of the duty paid on those inputs. 2. The appellant was also acting as a Conversant Agent of M/s. TISCO Limited. In terms of the Agreement between them, M/s. Tata Steel was supplying BF Grade Iron Ore and Nut Coke, for manufacturing of Pig Iron. Other inputs were procured by the Appellant from the market and used the same in the manufacture of Pig Iron. Tata Steel Limited were paying conversant charges. In addition to supply of those materials, they were giving reimbursement of Central Excise duty and road freight. 3. The officers of the department visited the factory of the Appellant and it was revealed from the RG-23 Register maintained by them that they have received the input S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vat Credit Rules, 2004. The present appeals filed by the Appellants are against this impugned order. 6. In their submission, the Appellant contended that Tata Steel did not supply all inputs required for manufacture of Pig Iron and they supplied short quantity of Coke in terms of the Agreement. They have to purchase other inputs from the market for manufacturing Pig Iron. Sponge Iron was also one of the inputs purchased by them as it helped in reduction of Coke consumption. They stated that the other Conversant Agent M/s. Usha Martin also procured other materials from market and also used Sponge Iron. The agreement did not mention any quantity of other inputs, which are essentially required to produce Pig Iron and also there was no restriction imposed by TISCO on using other materials. The Appellant stated that they started using Sponge Iron from 13/01/2004 and the Assistant Commissioner was intimated about the use of Sponge Iron vide their letter dated 02/04/2004, as during trial it was found that it was economical to use Sponge Iron to control cost. The appellant was maintaining all records as prescribed under the Central Excise Act and maintaining Gate Register recording in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of Pig Iron. (ii) The officers found from the Costing Sheet, the cost of Sponge Iron was not taken into consideration. (iii) The investigation has relied upon the literature Making Shaping and Treating of Steel published by Association and Iron Steel Engineers of United State Steel, to support of their allegation that Sponge Iron was not viable for use in the manufacture of Pig Iron. (iv) In the Central Excise Registration, the Appellant has not mentioned Sponge Iron as one of their major inputs In view of the above grounds, the impugned order concluded that the Appellant has not utilized the Sponge Iron for the manufacture of Pig Iron and accordingly the credit was denied. 12. We observe that the above allegations of the department are only on presumption basis and not supported by any evidence, in view of the following explanations submitted by the Appellant against each of the above four allegations: 13. (i) The allegation of the department is based on their verification of the Charge Report particularly on one day, ie on 30/06/2004. The Appellant stated that the Charge Report on that day did not show any issue of Sponge Iron since on that date th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduce the cost by using less Coke. Hence, we agree with the contention of the Appellant that the Literature cannot be relied upon to deny the credit otherwise eligible to them. (iv) The next objection raised in the impugned order was that in the Central Excise Registration, the Appellant has not mentioned Sponge Iron as one of their major inputs. The Appellant stated that at the time of taking the Registration, they have mentioned only the major inputs. This does not mean that they have not used the other inputs. We agree with the contention of the Appellant that Cenvat credit cannot be denied on the basis of this allegation. 14. We observe that the receipt of the input Sponge Iron into the factory was not in dispute. The RG-23 Register maintained by the appellant ,the Gate Register and the Stores Register containing all the details about the transport details of the Sponge Iron and issue of the same for manufacture of Pig Iron. The duty paid nature of the Sponge Iron was also not in dispute. Since receipt, utilization and duty paid nature of the input Sponge Iron was not in dispute, we hold that the Appellant are eligible for the Cenvat credit of the input Sponge Iron, as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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