2008 (2) TMI 674 - AT - Central Excise

Summary

Issues:
1. Stay application by the Revenue for the order of the Commissioner (Appeals) allowing credit.
2. Admissibility of Cenvat credit on capital goods used in captive mines.
3. Whether taking of credits renders the stay application infructuous.
4. Interpretation of the limitation period for claiming refund based on the decision in the case of M/s. Vikram Cement.

Analysis:
1. The Revenue filed a stay application against the order of the Commissioner (Appeals) allowing the respondent to avail credit of &8377; 98,13,422. The Commissioner had disallowed part of the claim, but the current application focused on the allowed credit. The history of the case involved a show cause notice issued in 1997, credit reversal by the respondent in 2001, and a subsequent order in 2002 appropriating the credits, which was not appealed against and deemed final by the Revenue.

2. The respondent, relying on a Supreme Court decision regarding Cenvat credit on capital goods used in captive mines, filed for a refund. The Department contended that the claim was time-barred under Section 11B of the Central Excise Act due to a delay in application. However, the Commissioner, in the impugned order, held in favor of the appellants, allowing the credit claimed by the respondent.

3. During the stay application hearing, the respondent had already utilized the credits as per the Commissioner's order, leading to a discussion on the application's relevance. The Tribunal considered the precedent cited by the respondent but found the facts distinguishable and disagreed with the reasoning. It was noted that the Supreme Court decision on limitation should be prospective, and thus, could not be used to undo the effect of a final order issued earlier. Consequently, the Tribunal directed the respondent not to utilize the credits and maintained the status quo.

4. The Tribunal's decision highlighted the importance of the limitation period for claiming a refund, emphasizing that the decision in the case of M/s. Vikram Cement could not be retroactively applied to override a previously final order. The Tribunal sided with the Revenue's argument that the refund claim was time-barred and should not have been allowed. As a result, the respondent was instructed not to use the credits granted by the Commissioner's order, and the application was disposed of.