2008 (12) TMI 534 - AT - Central Excise

Summary

Issues involved: Determination of excess Cenvat credit availed on capital goods, treatment of engraved printing cylinders as inputs or capital goods, invocation of extended period for demand, consideration of limitation period, re-quantification of demand.

Excess Cenvat credit availed on capital goods: The demand for excess amount of Cenvat credit availed on engraved printing cylinders as capital goods was confirmed against the appellants. The appellants had taken 100% credit at the time of receipt instead of the applicable 50% for capital goods. The Revenue contended that the cylinders, falling under Chapter 84, were part of textile printing machinery and should be treated as capital goods, not inputs.

Invocation of extended period for demand: The appellants argued that the extended period for demand could not be invoked due to the defacement of invoices related to the cylinders up to 30-3-2000. They also claimed that there could be a difference of opinion regarding whether the cylinder should be considered a consumable. The Tribunal agreed that the extended period could not be invoked based on these grounds.

Consideration of limitation period: The Tribunal found that the demand for the period beyond one year from the date of the show cause notice failed due to the limitations discussed. It was noted that the lower authorities had not adequately considered whether the cylinder could be classified as an input, necessitating further examination by the Original Adjudicating Authority.

Re-quantification of demand: The Tribunal directed that if the cylinder is considered capital goods, the demand should be limited to interest for the period of excess credit availed, not the full amount. The matter was remanded back to the Original Adjudicating Authority for re-quantification of the demand and to provide the appellants with an opportunity to present their case before a final decision is made.