2011 (1) TMI 105 - AT - Central Excise

Cenvat credit - SDR submits that the materials on which cenvat credit has been taken are not eligible for cenvat credit as most of the items have been used in erection of permanent structures - Commissioner (Appeals) has allowed the appeal taking into account the chartered engineer s certificate - Tribunal in the case of Vandana Global Ltd. has been rendered after passing the order of the Commissioner(Appeals), since the specific use of the items have not been looked into in the earlier stages of the proceedings order set aside and matter remanded to the original authority for fresh consideration

Summary

Issues:
1. Eligibility of cenvat credit on iron and steel products used for erection or construction.
2. Verification of chartered engineer's certificate.
3. Remand for fresh consideration.

Eligibility of Cenvat Credit:
The appeal before the Appellate Tribunal CESTAT, New Delhi concerned the eligibility of cenvat credit on iron and steel products used by the respondents, who are manufacturers, for erection or construction purposes. The original authority disallowed the credit, ordering recovery of Rs.3,75,378 along with interest and imposing a penalty. The Commissioner (Appeals) set aside the original order, subject to verification of a chartered engineer's certificate provided by the respondents. The learned SDR argued that the items were not eligible for credit as they were used in erection of permanent structures, although specific use was not discussed in the notice or order. Citing a Tribunal decision, the SDR sought a remand for fresh consideration.

Verification of Chartered Engineer's Certificate:
The Commissioner (Appeals) had allowed the appeal based on the chartered engineer's certificate but did not provide a final decision pending verification of its contents. The Appellate Tribunal noted that the specific use of items had not been examined earlier and that the Commissioner (Appeals) had entrusted certain aspects for verification by the original authority. Considering a recent Tribunal decision and the procedural gaps, the Tribunal set aside both the Commissioner (Appeals) and original authority's orders, remanding the matter for fresh consideration after granting a reasonable opportunity of hearing to the party.

Remand for Fresh Consideration:
Ultimately, the Appellate Tribunal allowed the department's appeal by way of remand for fresh consideration, given the unresolved issues regarding the specific use of the iron and steel products and the need for further verification. The cross objection was also disposed of in the same manner. This comprehensive analysis highlights the procedural and substantive aspects addressed in the judgment, emphasizing the importance of proper verification and consideration of specific details in determining eligibility for cenvat credit on structural items.