CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL MUMBAI WEST ZONAL BENCH EXCISE APPEAL NO: 85810 OF 2025 [Arising out of Order-in-Original No: PUN-EX-CGST-I-MK-COM-03/2024-25 dated 26^th November 2024 passed by the Commissioner of CGST & Central Excise, Pune – I.]

Danfoss Systems Limited

145 Off Mumbai – Pune Road, Pimpri, Pune - 411018 … Appellant versus Principal Commissioner of CGST & Central Excise Pune – I

41-A ICE House, Sassoon Road, Pune - 411001 …Respondent APPEARANCE:

Shri Prakash Shah, Senior Counsel with Shri Mihir Mehta, Advocate for the appellant Ms Prakriti Nigam, Joint Commissioner (AR) for the respondent CORAM:

HON’BLE MR C J MATHEW, MEMBER (TECHNICAL) HON’BLE MR AJAY SHARMA, MEMBER (JUDICIAL)

FINAL ORDER NO: 85094/2026 DATE OF HEARING: 04/08/2025 DATE OF DECISION: 22/01/2026 PER: C J MATHEW M/s Danfoss Systems Limited, canvassing against erroneous application of law in recovery of CENVAT credit of ₹ 2,41,49,130, along with applicable interest, under rule 14 of CENVAT Credit Rules, 2004 and penalty of like amount under rule 15 of CENVAT Credit Rules, 2004, is before us for the second time; on the earlier occasion, and in the name and style of Eaton Fluid Power Ltd, the appeal challenged recovery of ₹ 5,08,93,978 on two grounds of which, in accordance with the proposition of law set out in order¹ of the Tribunal disposing off appeal, [excise appeal no. 85624 of 2014] against order, [order-in-original no. PUN-EXCUS-001-COM-034-13-14 dated 21st November 2023] of Commissioner of Central Excise, Pune – I, demand for ₹ 2,67,44,848 relating to one was dropped in the order, [order-in-original no. PUN-EX-CGST-I-MK-COM-03/2024-25 dated 26th November 2024] of Commissioner of CGST & Central Excise, Pune-I. The original authority, notwithstanding the exposition of law in relation to the other element of the demand, chose to retain the recovery and, it appears to us, riding upon implied criticism of the Tribunal for travelling beyond limits that bind ‘creature of the statute’ and solely by reference to rule 4(1) of CENVAT Credit Rules, 2004.

2. The appellant is in the business of ‘hydraulic pumps’, ‘cylinders’, ‘valves’ and ‘power units’ manufactured through others, to whom ‘inputs’, on which credit was availed, had been supplied directly, and removed from those factories. The remnant dispute pertains to credit taken by the appellant on such inputs, despite deployment in the

1 [final order no. 85251 /2024 dated 1st March 2024]

manufacture, for having been sent directly by the vendors to the contractors which was held to be in breach of RULE 4. Conditions for allowing CENVAT credit. —

(1) The CENVAT credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service Provided that in respect of final products, namely, articles of jewellery or other articles of precious metals falling under heading 7113 or 7114 as the case may be of the First Schedule to the Excise Tariff Act, the CENVAT credit of duty paid on inputs may be taken immediately on receipt of such inputs in the registered premises of the person who get such final products manufactured on his behalf, on job work basis, subject to the condition that the inputs are used in the manufacture of such final product by the job worker Provided further that the CENVAT credit in respect of inputs may be taken by the provider of output service when the inputs are delivered to such provider, subject to maintenance of documentary evidence of delivery and location of the inputs.’

of CENVAT Credit Rules, 2004 and, thereby, not conforming to ‘inputs’ as well as referring to ‘(n) “job work” means processing or working upon of raw material or semi-finished goods supplied to the job worker, so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is essential for aforesaid process and the expression “job worker” shall be constru