Corroborative Evidence to prove Cenvat Credit not taken on Goods: CESTAT invalidates Demand of Duty on Scrap from Maintenance of Plant & Machinery [Read Order]

Corroborative Evidence - Evidence - Cenvat Credit - CESTAT - Demand of Duty - Plant and Mechinery - taxscan

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) invalidated the demand of duty on scrap from maintenance of plant & machinery when corroborative evidence to prove that the Cenvat credit was not taken on goods.

Sun Pharmaceuticals Industries Limited, the appellants are engaged in the manufacture of medicaments. At the time of maintenance of the plant and machinery, they undertook the activity to change old pipes, metal sheets, TMT Bars, steel bars, Beams, and Angels connected to that machinery.

While changing the said material the old material became waste and the same was sold after making it into pieces. The Department is that the appellant on the removal of this waste and scrap is required to pay the duty in terms of Rule 3(5A) of Cenvat Credit Rules, 2004.

It was observed that out of the total scrap sold by them only in respect of pipes, the Cenvat credit was taken, therefore on the sale of pipes as waste and scrap, the appellant has discharged the excess duty.

A Coram comprising of Mr Ramesh Nair, Member (Judicial)observed that the department raised the demand assuming that the appellant have taken Cenvat credit on steel material at the time of use thereof. In the SCN no evidence was adduced even of a sample case that the appellant have availed Cenvat credit in the goods in question.

The appellant has submitted the purchase register and the Cenvat register for the relevant period from which, it can be established that the appellant has not availed the cenvat credit on the goods except on the pipes.

While setting the impugned order, the Tribunal held that “without any single evidence of taking credit in the SCN, the SCN is bald and the proceedings flowing from the said SCN liable to be quashed on this threshold point itself.”

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SUN PHARMACEUTICALS INDUSTRIES LIMITED vs C.C.E. & S.T

Counsel for Appellant:   Shri A. B. Nawal

Counsel for Respondent:   Shri. Tara Prakash

CITATION:   2023 TAXSCAN (CESTAT) 145

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