By TIOL News Service

NEW DELHI, JUNE 15, 2017: THE short facts are that the Tribunal had decided the appeal filed and had ordered for vacating the penalty imposed on the appellant. However, since the high-powered committee had permitted the appellant SAIL to challenge the penalty imposed on them and not to challenge the confirmation of demand, the latter aspect of the impugned order was not considered for the decision.

In appeal, the Chhattisgarh High Court had ordered as follows:

"The short issue for decision in this tax case is as to whether we need to interfere the last part of the decision of the Tribunal whereby the appellant was refused an adjudication on the issue of denial of credit on the premise that they have not been granted permission to pursue the appeal by the Committee on Disputes (for short "COD?).

Hearing Ld. Counsel for the Appellant and Ld. Counsel for the Revenue, we see that the Hon'ble Supreme Court of India has done away with the concept of COD with effect from 17.02.2011 as per the judgment of Supreme Court in the case of Electronics Corporation of India Ltd. Vs. UOI - 2011-TIOL-18-SC-CX-CB. That being so, we cannot but vacate the last portion of the order of the Tribunal and remit the matter for reconsideration of the issue as to whether the Appellant had established that they have been wrongfully denied the credit."

And, therefore, the matter was heard by the CESTAT recently.

The issue is that during the relevant period M/s SAIL availed the benefit of CENVAT credit of duty on ‘bins' classified by the supplier under heading 8474.90.

However, Revenue doubted the correctness of the said classification adopted by the supplier M/s. Simplex Engineering & Foundry Works at their end and initiated proceeding for confirmation of differential duty on the ground that the bins were correctly classifiable under 73.08 andconsequently, the appellant would become disentitled to the benefit of the CENVAT credit since not included in the definition of ‘capital goods'. Moreover, since the supplier and the appellant fell under the same jurisdiction, common proceedings were initiated by way of issue of show cause notice dated 03.9.2002 proposing confirmation of demand against M/s. Simplex Engineering & Foundry Works for the period April, 2000 to August, 2001 and proposing the denial of CENVAT credit to the appellant.

A common order was passed confirming the demand against M/s. Simplex Engineering & Foundry Works and denying the CENVAT credit to the appellant along with imposition of penalty.

Moreover, in the appeal filed, the impugned demand made against M/s. Simplex Engineering & Foundry Works was set aside by the Tribunal on the point of limitation.

The appellant SAIL, therefore, submits that the benefit of limitation should also be extended to them insofar as the demand for reversal of CENVAT Credit is concerned.

The CESTAT observed -

"9. It has already been held by this Tribunal in final order dated 06.06.2016 that no malafide can be attributed to the appellant and accordingly, imposition of penalty has already been set aside. We are of the view that the same benefit is to be extended to the appellant for the demand raised also. Consequently, the demand falling beyond the normal time limit cannot be sustained and is set aside. For the purpose of quantification of the demand within the normal time limit, the case is remanded back to the original adjudicating authority."

In fine, the demand for reversal of CENVAT Credit is confirmed only to the extent falling within the normal time limit. The matter is remanded to the adjudicating authority for re-quantification.

The Appeal was disposed of.

(See 2017-TIOL-2023-CESTAT-DEL)