Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise & Service Tax Appellate Tribunal (CESTAT): The dispute in this appeal was filed before Archana Wadhwa, Member, related to the availability of Cenvat Credit of duty paid on various iron and steel items.

The various iron and steel items according to the Revenue had been utilized as supporting structures. The Lower Authority referred to the Explanation under Section 2(k) of Cenvat Credit Rules and the case of Vandana Global Ltd. v. CCE, 2010(253) ELT 440(Tri-LB) where it was held that such item used for supporting structures are not entitled to the benefit of Cenvat Credit. But it was found that the case referred to above was set aside by Chhattisgarh High Court referred to as Vandana Global Ltd. v. CCE, 2018(16) GSTL 462(Chhattisgarh). The impugned order was assailed for being time-barred.

The Tribunal found the demand to be time-barred and also the case referred was set aside by Chhattisgarh High Court. Admittedly the credit was being availed by the assessee by reflecting the same in the Cenvat Credit. In the circumstance of the case, no malafide can be attributed to the appellant so as to invoke the extended period of limitation. Therefore, the impugned order was set aside. [Sangam India Ltd. v. Commr. of Excise and Service Tax, 2019 SCC OnLine CESTAT 1, dated 08-02-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise and Service Tax Appellate Tribunal (CESTAT): A Division bench comprising of C.L. Mahar (Technical) and Ajay Sharma (Judicial), Members. upheld the order of Excise Commissioner directing reversal of Cenvat credit against a manufacturer for non-compliance of Cenvat Credit Rules.

The instant appeal arises against an order of the Excise Commissioner directing reversal of Cenvat credit availed by the appellant. Appellant is the manufacturer and supplier of leaf springs falling under Chapter 73 of Schedule I to the Central Excise Tariff Act, 1985. During 2014, it got an order from the Government of India’s Defence Vehicles Factory and as an established practice, availed Cenvat credit on inputs, input services and capital goods as per Cenvat Credit Rules, 2004 as per which it should have reversed Cenvat credit at the rate of 6% of the value of exempted goods. However, no separate accounts of Cenvat credit availed on exempted and dutiable goods had been maintained by the appellant. Accordingly, show cause notices the demanding reversal of Cenvat credit was issued to the appellant, which was adjudicated by the Commissioner.

The Tribunal noted that Rule 6 of the Cenvat Credit Rules clearly stipulates that if any input, input services or capital goods are used in manufacture of goods which are exempted from payment of central excise duty, then the manufacturer is legally required to reverse back the 6% of the value of clearances from the accumulated Cenvat credit. The manufacturer can also maintain a separate account of inputs and the credits thereon for both dutiable as well as exempted goods, and in that case, the requirement of 6% of the value of clearances is needed not to be followed.

In view of the above and decision rendered in NCS Distilleries/Estates Pvt. Ltd. v. CCE, Visakhapatnam; 2006 SCC OnLine CESTAT 644, the Tribunal held that since the appellant had not maintained separate account of Cenvat credit availed on exempted as well as dutiable final products, hence, it was liable to reverse the Cenvat credit. [Jamna Auto Industries Limited v. CCE & ST, Ujjain,2018 SCC OnLine CESTAT 863, decided on 12-11-2018]