The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to East India Holdings by quashing the demand of CENVAT credit of excise duty availed on the Cast Iron (CI) molds on the ground of non-violations of CENVAT Credit Rules(CCR), 2004.
East India Holding Pvt. Ltd, the appellant assessee engaged in the manufacture of excisable goods Ingots, Billets, etc. in their factory, and the entire quantity of Cast Iron (CI) Mould were converted into scrap with time, and the said scrap was consumed in their furnace for manufacture of Ingot mold and as there was no mention of consumption of Cast Iron (CI)Mould scrap in their Daily Production cum Consumption slip and computerized monthly production register.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand for irregular CENVAT Credit and imposed a penalty equivalent to the irregular credit under Rule 15 of the CENVAT Credit Rules (CCR ), read with Section 11AC of the Central Excise Act, 1944.
Ajay Sanwaria, the counsel for the assessee contended that there was no evidence of establishing the removal of goods from the factory premises without payment of duty.
Also submitted that whatever molds were received, consumed, and used, were duly accounted for/reflected in their Mould Register.
P. K. Ghosh, the counsel for the department relied on the decisions made by the lower authorities and contended that the entries made in the Register cannot be relied upon, as at the time of the visit of audit officers, the assessee could not produce any evidence regarding the quantity of C.I. Moulds consumed/used and available on stock.
The Bench observed that there was also no provision in the CCR to reverse the CENVAT credit when they are scrapped after being put into use and the assessee was not required to reverse the CENVAT credit availed on the capital goods, CI Moulds, and the credit was not liable to be reversed and there was no liability of interest or penalty.
The two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) quashed the demand of CENVAT Credit availed by the assessee.
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