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2023 (6) TMI 448 - CESTAT KOLKATARecovery of Central Excise duty - shortages of 189.50 MT of Pig Iron - valid reasons for shortages were given or not - HELD THAT:- The shortage was noticed during the course of stock taking by the Anti Evasion wing of Haldia Commissionerate. The Appellant could not offer any valid reason for the shortages. In fact the Appellant has paid the duty and cess along with interest on the shortages. Hence, the demand of duty and cess along with interest on the shortages upheld. Since there was no proper explanation for the shortages, the penalty imposed under section 11 AC of the Central Excise Act,1944 also upheld. Irregular availment and utilization of credit on the Angles, Channels, Beams, Joists etc - HELD THAT:- The said items of iron and steel products were the inputs used in the manufacture of capital goods and the said capital goods were in turn used in the manufacture of their final products. The said goods were also used in the pollution control system. The structure and effluent system are taken together will constitute a unit of pollution control system - As per Rule 2(k) of Cenvat Credit Rules, 2002, Input includes goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. In the present case, the Angles, Channels, Beams, Joists are the inputs used in the manufacture of capital goods namely, pollution control system. The structure and effluent system are taken together constitute a unit of pollution control system. Hence, it can be construed that the Angles, Channels, Beams are used in the manufacture of capital goods and hence they fall within the ambit of ‘inputs’ eligible for credit - The Appellant are eligible for the credit of Rs.5,82,44,793.93 availed on the Angles, Channels, Beams, Joists used in the manufacture of capital goods. Disallowance of credit taken on welding Electrodes and MIG wires - HELD THAT:- The Appellant stated that the the said goods were used in the manufacture of capital goods and in the repairs and maintenance of plant and machineries and hence they are eligible for the credit. In support of their contention, they relied upon the decision in the case of AMBUJA CEMENTS EASTERN LTD. VERSUS COMMISSIONER OF C. EX., RAIPUR [2010 (4) TMI 429 - CHHAITISGARH HIGH COURT], wherein it has been held that CENVAT credit is available to welding electrodes used in the repair and maintenance of machineries - the Appellant are eligible for the credit of Rs33,63,796.67 on the welding Electrodes and MIG Wires used in repair and maintenance of machineries, as inputs’ under Rule 2(k) of the CENVAT Credit Rules, 2004. Denial of credit availed on 73.66 M.T of Iron ore Fines on the ground that they were not used in the manufacture of final products - HELD THAT:- The Appellant stated that the fines contained in the Ore procured by them from M/s Tata Metalinks were ‘thicker’ in size which can be used in their DRI plant to produce ‘sponge iron’. It is observed that the receipt and duty paid nature of the iron ore are not in dispute. The Appellant states that the iron ore fines received by them were thicker in size and can be utilised to produce ‘sponge iron’. There is no evidence brought on record to disprove this claim. Since, the receipt and duty paid nature of the inputs are not in dispute and no other evidence brought on record to establish that the iron ore fines were not utilised in the manufacture of their final products, it is held that the Appellant are eligible for the credit of Rs 23680.68 availed on the iron ore fines. The demand of Rs. 3,82,278/- confirmed in the impugned order on the shortages of 189.50 MT of Pig Iron. The demand of interest and penalty on this count is also confirmed. The other demands on Angles, Channels, Beams Joists and welding electrodes, MIG Pipes and the demand on Iron Ore fines set aside. Accordingly, the impugned order is modified on the above lines. Appeal disposed off.
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