DATE OF HEARING: 13.04.2026

DATE OF DECISION: 02.06.2026

FINAL ORDER NO’s. 51015-51016/2026

JUSTICE DILIP GUPTA:

Excise Appeal No. 55196 of 2023 has been filed by Jayaswal NECO Industries Limited¹1. the appellant to assail that portion of the order dated 29.03.2023 passed by the Principal Commissioner that disallows CENVAT credit of Rs. 53,94,564/- (including credit of Rs. 33,44,889/- reversed by the appellant before issuance of show cause notice) with interest and penalty.

2. Excise Appeal No. 55419 of 2023 has been filed by the department to assail that portion of the order dated 29.03.2023 passed by the Principal Commissioner that drops the demand of recovery of CENVAT credit amounting to Rs. 67,50,989/-.

3. The appellant is engaged in the manufacture of dutiable goods such as sponge iron, pig iron, billets, classifiable under Chapter 72 of the First Schedule to Central Excise Tariff Act, 1985²2. Tariff Act

4. The appellant availed CENVAT credit on various input services, details of which were reflected in the periodical returns filed by it.

5. An audit was initiated by the officers of the Internal Audit Party, Central Excise Commissionerate, Raipur for the period from March 2012 to January 2014 and certain discrepancies were communicated by the department by a Final Audit Report dated 01.09.2014.

6. An audit was also conducted by CAG for the period April 2011 to March 2013, wherein the CAG also intimated several observations by a letter dated 03.06.2014.

7. Subsequently, special audit of records of the appellant was conducted for the period April 2011 to January 2014, wherein several observations were conveyed to the appellant by a letter dated 22.07.2014.

8. In response to the audit memos, the appellant made detailed submission and explained that CENVAT credit had been validly availed on the input services. Meanwhile, CENVAT credit of Rs. 33,44,889/- availed on various services was reversed by the appellant with interest of Rs. 14,06,799/-.

9. However, a show cause notice dated 23.02.2016 was issued to the appellant proposing to recover a central excise duty amounting to Rs. 2,49,40,473/- with interest and penalty, alleging wrongful availment of CENVAT credit on various issues like credit availed on ineligible input services, credit availed on services which were not received in the factory premises of the appellant and CENVAT credit availed on the basis of invalid documents. A proposal was also made for appropriation of CENVAT credit with interest which was reversed by the appellant.

10. The appellant filed a detailed reply dated 13.03.2003 and contested the proposals made in the show cause notice.

11. The show cause notice was adjudicated by the Principal Commissioner by an order dated 29.03.2023. CENVAT credit to the extent of Rs. 1,95,45,909/- availed by the appellant against various input services was allowed, but CENVAT credit amounting to Rs. 53,94,564/- was disallowed. The details of the demands proposed in the show cause notice which were subsequently dropped/confirmed by the order are as follows: