2010 (9) TMI 312 - AT - Central Excise

Cenvat credit - CBFS as supplement of fuel stock is not in dispute - type of material is likely to cause much pollution - Commissioner (Appeals) held that the disputed material have been used by the respondent as an alternative fuel alongwith other fuels and the denial of credit by the original authority was not justified - no valid grounds to interfere with the order of the Commissioner (Appeals) Appeal rejected

Summary

Issues:
1. Condonation of delay in filing the appeal by the Department.
2. Disallowance of Cenvat credit on Carbon Black Feed Stock (CBFS) claimed to have been used as fuel.
3. Original authority's denial of Cenvat credit, duty demand, and penalty imposition.
4. Commissioner (Appeals) setting aside the original authority's order.
5. Validity of using CBFS as a supplement for fuel stock.
6. Justification of the denial of credit by the original authority.

Analysis:
1. The Tribunal first addressed the issue of condonation of delay in filing the appeal by the Department, where the application for condonation of a one-week delay was granted after hearing both sides. Subsequently, with the consent of both parties, the appeal was taken up for final hearing.

2. The case revolved around the disallowance of Cenvat credit on CBFS, which the respondent claimed to have used as fuel. The original authority denied the credit, citing the unsuitability of CBFS due to pollution concerns. This denial led to a duty demand, penalty imposition, and the Commissioner (Appeals) setting aside the original order.

3. During the proceedings, the Department reiterated the original authority's findings, while the company's Authorized Representative supported the Commissioner (Appeals)' decision. The company argued that CBFS was used as a supplement by mixing it with furnace oil, as a one-time experiment. The Commissioner (Appeals) found in favor of the company, stating that the material was indeed used as an alternative fuel, and the denial of credit by the original authority was unjustified.

4. The Tribunal carefully considered the submissions and records, noting that the use of CBFS as a fuel supplement was not disputed. It was highlighted that the material's use in other industries did not render it unsuitable for use as fuel. Ultimately, the Tribunal upheld the Commissioner (Appeals)' decision, finding no valid grounds to interfere with the ruling.

5. Consequently, the appeal by the Department was rejected, and the order was dictated and pronounced in the open Court. The judgment emphasized the permissible use of CBFS as a fuel stock by the respondent, leading to the dismissal of the Department's appeal.