Commissioner of Central GST and Excise v. Harinagar Sugar Mills Ltd.

What happened

Revenue challenged CESTAT relief on credit for services, iron and steel used to repair plant, and duty on scrap. The taxpayer’s inputs and services were not used exclusively in exempted production, and the repair materials were not employed to build structures.

Questions before the court

• Did the tribunal make a substantial error of law when accepting the documented use of inputs and rejecting the corresponding excise demands?

Why the court ruled this way

Actual use, rather than generic material descriptions, controlled the credit questions. The tribunal had assessed evidence and applied relevant law; Revenue established no perversity or substantial legal error on the credit or scrap findings.

Controlling point

Actual use, rather than generic material descriptions, controlled the credit questions. The tribunal had assessed evidence and applied relevant law; Revenue established no perversity or substantial legal error on the credit or scrap findings.

Order and next steps

All admitted questions answered against Revenue; its appeal dismissed and CESTAT order of 11 December 2019 affirmed without costs.

Practical implications

The operative result is case-specific: All admitted questions answered against Revenue; its appeal dismissed and CESTAT order of 11 December 2019 affirmed without costs. Apply it within the court’s stated limit: The result follows the taxpayer’s proof of use and does not create automatic credit for every iron/steel procurement or exempt product.

Limits of this ruling

• The result follows the taxpayer’s proof of use and does not create automatic credit for every iron/steel procurement or exempt product.