Order Date – 17 February 2023

Parties: M/s RMC Switch Gears Ltd. Vs Commissioner of Central Excise, Central Excise Commissionerate

Facts – 

• The Appellant, M/s RMC Switch Gears Ltd, was issued with a show cause notice proposing to deny Cenvat credit to the appellant on goods received from M/s Bhushan Steels on the ground that M/s Bhushan Steels had undertaken processes which did not amount to manufacture but had paid central excise duty. Further Rule 3 of the Cenvat Credit Rules4, 2004 provides for credit of duty of excise, but not the credit of an amount deposited under section 11D.

Issue –

• Whether the denial of Cenvat credit is in order?

Order –

• The Tribunal observed that the officers who had jurisdiction over M/s Bhushan Steels should have examined this matter while assessing the returns filed by M/s Bhushan Steels and taken appropriate action. The officer who issued the SCN had jurisdiction over the appellant and not over M/s Bhushan Steels. Therefore, in the first place the Jurisdictional Officer cannot decide or determine if the activities of M/s Bhushan Steels amounted to manufacture or not. Therefore, the SCN itself was issued without any authority of law.
• Neither the appellant in this case who is the only the buyer of the goods nor the Assistant Commissioner who has jurisdiction over the appellant had any jurisdiction or right to change the assessment made by M/s Bhushan Steels. For this reason alone, the entire SCN and the consequent orders need to be set aside.
• Nothing in the CCR, or the Central Excise Rules or the Act which places obligation on any assessee who is the buyer of the goods. The SCN and the consequent orders need to be set aside on this ground as well.