2012 (3) TMI 440 - AT - Central Excise

Summary

Issues involved: Stay application seeking waiver of pre-deposit and stay of recovery, whether cement can be considered as an input under Rule 2(K) of The Cenvat Credit Rules, 2004, and whether structural items can be treated as capital goods under Rule 2(a) of the said Rules.

Stay Application:
The appellant sought waiver of pre-deposit and stay of recovery for adjudged dues, including denied CENVAT credit on cement and structural items, along with a penalty. The records indicate the usage of cement and structural items for making structural support to various plants and equipment. The question at hand is the classification of cement as an input and structural items as capital goods under the Cenvat Credit Rules.

Legal Arguments:
The appellant relied on legal precedents such as Union of India vs. Associated Cement Company Limited and Commissioner vs. Sai Sahmita Storages (P) Ltd., while the Additional Commissioner argued in favor of the Revenue based on the Tribunal's Larger Bench decision in Vandana Global Ltd. vs. Commissioner.

Decision and Analysis:
Upon considering the submissions, the Tribunal found that the usage of cement and structural items did not align with the definitions of input and capital goods as per the Cenvat Credit Rules. The Tribunal referenced the Larger Bench decision in Vandana Global Ltd. case, which emphasized that certain structures, including foundations and supporting structures, cannot be classified as capital goods. The appellant was directed to make a pre-deposit towards the impugned demand of duty within a specified timeframe.

Conclusion:
The Tribunal did not find a prima facie case in favor of the appellant, leading to the directive for a pre-deposit. The decision was based on the interpretation of the Cenvat Credit Rules and relevant legal precedents, highlighting the specific criteria for classifying cement and structural items in the context of CENVAT credit.