The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the denial of CENVAT credit of excise duty on the manufacture of High Carbon Ferro Chrome (HCFC) on the ground of CENVAT credit eligibility.
Balasore Alloys Limited, the appellant assessee was a manufacturer of High Carbon Ferro Chrome (“HCFC”) falling under Tariff Item 72024100 of the Central Excise Tariff Act, 1985, at its factory at Balgopalpur and the assessee had been availing CENVAT credit on inputs, input services and capital goods and utilizing the same for payment of excise duty on clearance of HCFC from its factory and the manufacture of HCFC, Chrome Ore is the principle raw material.
The assessee appealed against the order passed by the Commissioner, Central Excise Customs & Service Tax, Bhubaneswar for confirming the recovery of inadmissible CENVAT Credit of Rs.1,49,69,415/- availed on Input Services and Capital Goods.
Joidip Basu, the counsel for the assessee contended that the assessee had availed CENVAT Credit of input services received at the mines along with credit of capital goods installed at the Chrome Ore Beneficiation Plant (COB) Plant, and no CENVAT Credit was availed by the COB plant at any stage.
S.S. Chhattopadhyay, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was wrongly availed the CENVAT credit and the demand was as per the law and liable to be sustained.
The Bench observed that the CENVAT credit on capital goods would be admissible in the hands of the factory and the denial of CENVAT credit on input services and capital goods was not sustainable.
The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) held that the demand confirmed in the impugned order was not sustainable and quashed while allowing the appeal filed by the assessee.
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