2015 (7) TMI 1195 - AT - Central Excise

CENVAT credit - various steel items - denial on the ground that the said goods are not confirming to the definition of either inputs or capital goods - Held that - the appellant had purchased the old and used steel plant with its furnace in the year 2007 and to make it workable the disputed goods have been used for construction/ erection of rolling platform penal track material supporting stand storage platform and for repairing of old and used parts. Considering the activities undertaken by the appellant - disputed goods should merit consideration as inputs for the purpose of taking cenvat credit. Extended period of limitation - Held that - the appellant had intimated the cenvat particulars with regard to the disputed goods in the RG-23 part-II Register and also reflected in the monthly ER-I return filed before the Jurisdictional Central Excise Authorities - the activities of the appellant were within the knowledge of Department the SCN issued by invoking the extended period of limitation is not maintainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility to take cenvat credit on disputed goods as components of capital goods
2. Bar of limitation for SCN issued in 2012 covering the period from August 2007 to August 2009

Analysis:
1. The appellant, engaged in manufacturing Iron and Steel products, availed cenvat credit on goods denied by the Central Excise Department. The appellant argued that the disputed goods are inputs for manufacturing capital goods of Chapter 84 of CETA within the factory. The Ld. Advocate contended that the SCN issued beyond one year from relevant date is time-barred under Section 11A. Citing judgments, the Ld. Advocate argued against invoking the extended period for duty demand and penalty without suppression, misstatement, collusion, or fraud. The Tribunal found the disputed goods used for construction and repair activities, qualifying as inputs for cenvat credit. The appellant had disclosed cenvat particulars to the Department, making the extended limitation period inapplicable.

2. The Revenue respondent argued that the appellant did not provide details of capital goods using the disputed items, justifying the SCN issued under the extended limitation period. Citing tribunal decisions, the Revenue supported the demand confirmed by authorities. The Tribunal considered the activities undertaken by the appellant, where the disputed goods were used for construction and repair purposes related to the steel plant purchased in 2007. The Tribunal found that the disputed goods qualified as inputs for cenvat credit, as disclosed in the appellant's records and returns. The Tribunal concluded that the SCN issued beyond the limitation period was not maintainable, setting aside the impugned order and allowing the appeal on both merits and limitation.

This judgment highlights the importance of correctly categorizing goods for cenvat credit eligibility and the relevance of timely issuance of SCNs within the limitation period. The Tribunal's decision was based on the appellant's activities, disclosure of cenvat particulars, and the absence of suppression or fraud, emphasizing compliance and transparency in availing credits and dealing with tax authorities.