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TMI Blog2023 (11) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... that angles , beams and channels were covered within definition of capital goods in rule 2(a) of CENVAT Credit Rules, 2004, reliance was placed on the decision of the Tribunal in M/S. MANGLAM CEMENT LTD. VERSUS C.C.E., JAIPUR-I [ 2018 (3) TMI 1547 - CESTAT NEW DELHI] and in CC CE, VISAKHAPATNAM VERSUS M/S. A.P.P. MILLS LIMITED [ 2013 (7) TMI 494 - CESTAT BANGALORE ]. It is, however, on record that the appellant had not yet procured the cranes for whose support the said goods had been purportedly deployed. The facts being, thus, at variance with the cited decisions and, the capital goods , not having been installed the claim of eligibility of goods used for installing structural support is not tenable. CENVAT Credit Rules, 2004 offers the framework and the mechanics for neutralization of duty discharged at preceding stage of value addition chain ; it is, therefore, procedural enunciation in which availment , as is reversal , is in the hands of assessee while restoration , as is recovery, of credit is left to the jurisdictional authorities. While rule 14 of CENVAT Credit Rules, 2004 enables recourse to section 11A of Central Excise Act, 1944 as does rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed on the ground that the procured mild steel (MS) pipes were not inputs as defined in rule 2(k) of CENVAT Credit Rules, 2004 and, hence, ineligible in terms of rule 3 of CENVAT Credit Rules, 2004. The second element of the demand, of ₹ 14,55,597 towards credit availed of duty paid on procurement of angles , beams and channels , was confirmed on the ground that these were neither inputs , as defined in rule 2(k) of CENVAT Credit Rules, 2004, used in manufacture of excisable goods nor finding fitment as required for manufacture of capital goods , as defined in rule 2(a) of CENVAT Credit Rules, 2004, as permitted in Explanation 2 below the former definition. Inevitably, applicable interest was ordered to be recovered under section 11AB of Central Excise Act, 1944 besides penalty of ₹ 54,28,853 under section 11AC of Central Excise Act, 1944 being imposed in the impugned order. 3. The notice came to be issued on 11th June 2013 and it is on record that ₹ 14,55,597 had been reversed by the appellants on 22nd October 2008. Learned Counsel for the appellant submitted that, insofar as the availing of credit on unfinished mild steel (MS) pipes is concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken without the knowledge of the jurisdictional authorities and discharge of duty thereafter is not tantamount to consent of authorities for acceptance of the claim of the appellant that denial of credit is, thereby, precluded. He submitted that even if that were so, one-to-one correlation of availment and utilization as well as of such credit being less than duty paid on clearance would need to be ascertained. Reliance was placed by him on the decision of the Tribunal in Commissioner of Central Excise, Belapur v. UPM Kymmene India Pvt Ltd [2015 (329) ELT 161 (Tri-Mumbai)]. He submitted that the angles , beams and channels were not, of themselves, capital goods and had not been utilized for manufacture of capital goods on site thus placing these beyond coverage of rule 2(k) of CENVAT Credit Rules, 2004. 6. Having considered the records and submissions, we find that mild steel (MS) pipes procured by them had been cleared on payment of duty after undertaking some processing. It is now settled law that with duty having been paid, it was not open to central excise authorities to dispute credit availed on the goods procured for the purpose. This is abundantly clear from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll that the same were not manufactured goods. If duty on decoiled HR/CR coils was paid bona fide, then availing credit of duty paid on HR/CR coils cannot be faulted. 10. Apart from the above, 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. In these circumstances, the CESTAT following its decision in the case of Ashok Enterprises - 2008 (221) E.L.T. 586 (T), Super Forgings - 2007 (217) E.L.T. 559 (T), S.A.I.L. - 2007 (220) E.L.T. 520 (T) = 2009 (15) S.T.R. 640 (Tribunal), M.P. Telelinks Limited - 2004 (178) E.L.T. 167 (T) and a decision of the Gujarat High Court in the case of CCE v. Creative Enterprises reported in 2009 (235) E.L.T. 785 (Guj.) has held that once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity docs not amount to manufacture. Admittedly, similar view taken by the Gujarat High Court in the case of Creative Enterprises has been upheld by the Apex Court [see 2009 (243) E.L.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacturer shall pay an amount equal to the Cenvat credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of Section 3 or Section 4 or Section 4A of the Act, as the case may be. Explanation. - The amount paid under this sub-rule shall be allowed as Cenvat credit as if it was a duty paid by the manufacturer who removes the goods. (3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, reconditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner. From the plain reading of the above Rule it can be seen that under this provision Cenvat credit is allowed on the duty paid material treating it as inputs for the purpose of various processes and after processing if the activity is not amount to manufacture the assessee is required to clear such processed goods on payment of duty which is equal to Cenvat credit and if the activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit of ₹ 14,55,597 is in accordance with the scheme of CENVAT. 9. CENVAT Credit Rules, 2004 offers the framework and the mechanics for neutralization of duty discharged at preceding stage of value addition chain ; it is, therefore, procedural enunciation in which availment , as is reversal , is in the hands of assessee while restoration , as is recovery, of credit is left to the jurisdictional authorities. While rule 14 of CENVAT Credit Rules, 2004 enables recourse to section 11A of Central Excise Act, 1944 as does rule 15 of CENVAT Credit Rules, 2004 enabling recourse to section 11AC of Central Excise Act, 1944, the latter cannot be drawn upon in the absence of the former. Legislative intent is amply clear that recourse to rule 14 and rule 15 of CENVAT Credit Rules, 2004 will have the effect, and consequence, of section 11A and section 11AC of Central Excise Act, 1944 respectively and not vice versa. It is, therefore, moot if every case of credit erroneously availed must necessarily be visited with penal consequence of section 11AC of Central Excise Act, 1944 that follows from invoking section 11A of Central Excise Act, 1944. Indeed, as reversal of credit is also wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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