2010 (6) TMI 763 - AT - Central Excise

Summary

Issues involved:
The issue involves the eligibility of the respondent to avail Cenvat credit on goods like plates, angles, etc., and whether the limitation period applies.

Summary:

Issue 1: Eligibility of Cenvat credit on goods like plates, angles, etc.:
The respondent, engaged in manufacturing various items, availed Cenvat credit on goods falling under different chapters as capital goods for the year 2005-2006. The Revenue authorities contended that these items did not qualify as capital goods. A show cause notice was issued to the respondent, who contested it on various grounds, including limitation. The Adjudicating Authority disallowed the Cenvat credit and imposed penalties. The Commissioner (Appeals) set aside the order based on limitation and merit. The Revenue appealed the decision.

Details:
The Revenue argued that the goods in question did not fall under the definition of capital goods as per the Cenvat Credit Rules, 2004, citing a precedent by the Larger Bench of the Tribunal. They contended that the respondent should have known they were ineligible for the credit.

The respondent's counsel countered that the precedent cited was not applicable to this case, emphasizing the differences. They argued that there were conflicting views on the issue during the relevant period and that they believed in good faith that they were eligible for the credit. They cited various decisions supporting their position on limitation.

Issue 2: Application of limitation:
The Commissioner (Appeals) found that the lower adjudicating authority erred in invoking the extended period without justification. The Commissioner disagreed with the imposition of penalty and interest, stating that there was no intent to evade duty. The Revenue did not contest these factual findings.

Details:
The Commissioner's findings on limitation were not challenged by the Revenue. Citing a Supreme Court case, it was established that in cases of bona fide doubt, the provisions of extended period do not apply. As the Revenue did not contest the limitation aspect, the appeal was rejected solely on limitation grounds without delving into the merits of the case.