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M/s. Tower Steels Ltd. Versus CCE, Madurai

2016 (5) TMI 837 - CESTAT CHENNAI

Job-work - Eligibility of refund claim - Availability of Cenvat credit - Moulds not used in appellant’s factory - Ground of rejection of refund claim is beyond the scope of SCN - Appellant submitted that the SCN is faulty in as much as the applicable rule in this case is 4(5)(b) of Cenvat Credit Rules, 2004 wherein there is no condition of receiving back the moulds within 180 days. The show cause notice wrongly applied rule 4(5)(a). - Held that:- there can be no doubt that the spirit behind .....

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fund of reversed credit is not in order. Therefore, by following the judgment of Hon'ble Bombay High Court as upheld by Hon'ble Supreme Court in the case of CCE, Nagpur vs. Indorama Textiles Limited [2009 (10) TMI 571 - BOMBAY HIGH COURT] and the Tribunal ruling in CCE & C, Daman, VAPI vs. Guala Closures (I) Private Limited [2009 (1) TMI 564 - CESTAT, AHMEDABAD], there is no condition under Rule 4(5) (b) of Cenvat Credit Rules that moulds sent by the respondents has to be brought back within 180 .....

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appellants) Kappalur, Madurai are engaged in manufacture of CTD Bars, MIS Roll, Wire Coil, Wire Rods and Wire Nails. 2. The appellants sent inputs such as scrap etc. and CI Ingot Moulds on which Cenvat Credit was taken to their job-worker who manufactured MS Ingots and sent the same it back to the appellants. The MS Ingots manufactured by the job worker is an intermediate product which is used in the manufacture of CTD bars in the factory of the appellants. Such CTD bars were cleared on payment .....

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t in the manufacture of finished goods namely CTD bars in their factory. As the CI Ingot Moulds were finally consumed in the manufacture of finished goods, the same was declared by the appellants as scrap though it is capital goods as per Rule 2(a) of Cenvat Credit Rules, 2004. 3. On a visit to the appellant company s premises on 14.3.2006, and on verification of records by the Divisional Preventive Unit of Madurai I Division, it was found that the assessee company availed Cenvat Credit on CI In .....

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t be used in the appellants factory as capital goods and hence the appellant company mis-declared as Inputs and the said moulds were not sent back by the job workers within the specified period (180 days) and the said moulds became scrap at job workers premises itself. The Joint Commissioner in the Order-in-Original No.18/2012 dated 29.6.2012 has held that the point to be considered is whether the ingot moulds are to be treated as Inputs and used in the manufacture of final products. In the fin .....

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lf of the appellant submits that it is clear from the said order of the Ld. Commissioner (Appeals) has already allowed the Cenvat credit on merit and only verification has been ordered which has been accepted by the department. He also submits that all the relevant details were furnished to prove the consumption of CI Ingot Moulds in the manufacture of MS Ingot which in turn was received back by the appellant and used in the manufacture of duty paid CTD bars in their factory. In the denovo adjud .....

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ion of refund on a ground now raised in the impugned order is not sustainable in law in as much as the ground now raised is beyond the scope of the show cause notice. On merits, it is submitted that the show cause notice is faulty in as much as the applicable rule in this case is 4 (5) (b) of Cenvat Credit Rules, 2004 wherein there is no condition of receiving back the moulds within 180 days. The show cause notice wrongly applied rule 4 (5) (a). Rule 4 (5) (b) reads as follows : (b) The CENVAT c .....

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n the appellants are eligible for credit in as much as the rule provides taking of credit subsequently. Further as the moulds are used as input finally and consumed in the manufacture of intermediate goods namely MS Ingots, the appellant is eligible for credit as per Rule 2(i) in as much as input means all goods with certain exceptions. He prayed that the appeal may please be allowed with consequential relief of refund with interest. He relied on the following citations :- 1. Vikram Cement Vs .....

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cture of ingots which in turn have been used in the manufacture of final products viz. CTD Bars and the same has been cleared on payment of duty. 8. Heard both the sides in the matter. After perusing the orders passed by the lower authorities, it is felt that they have erred in their findings to the effect that that the moulds were not used in the appellant s factory, and as such the same is not eligible for CENVAT credit. This understanding of law is contrary to the provisions of CENVAT Credit .....

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nufacturing process is carried on behalf of the principal, credit is not to be denied. There can be no doubt that the spirit behind the CENVAT scheme which is a beneficial one, would be lost, if a statutory benefit is denied by wrong interpretation of certain procedural provisions which permit the facility so long as the item in question are treated either as inputs or as capital goods. Therefore, the denial of credit is clearly an error. It is not even the case of the Revenue that the ingot mou .....

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