2011 (4) TMI 849 - AT - Central Excise

Cenvat credit - Steel structures, gas compressors, and spring blade belts - Held that - Cenvat credit was taken in the month of July, 1997 and hence, the eligibility to cenvat credit has to be determined in accordance with the legal provisions in force at the material time, in particular taking note of the fact that the definition of Capital goods had undergone change w.e.f. 23.07.96 - As such the appellants are not eligible for cenvat credit in respect of Steel structures, gas compressors, and spring blade belts as these are not in the category of specified capital goods or inputs for such specified capital goods. As regards other items, the appellants need to establish that those items are either capital goods or those are inputs for specified capital goods, for which necessary details and documentary evidence were not made available to the authorities - Therefore, remand the matter to the lower appellate authority for fresh decision.

Summary

Issues: Denial of cenvat credit for various items including imported items; eligibility of cenvat credit based on legal provisions in force at the material time; determination of items as capital goods or inputs for specified capital goods; remand for fresh decision on remaining items.

In this case, the Appellate Tribunal CESTAT, CHENNAI, comprising Hon'ble Ms. JYOTI BALASUNDARAM, Vice President, and Hon'ble Dr. CHITTARANJAN SATAPATHY, Technical Member, heard arguments from both sides regarding the denial of cenvat credit for items such as Steel structures, gas compressors, and spring blade belts. The Tribunal noted that the cenvat credit was claimed in July 1997, and therefore, the eligibility for such credit must be determined based on the legal provisions applicable at that time, especially considering the changes in the definition of "Capital goods" from 23.07.96. Consequently, the appellants were found ineligible for cenvat credit for the mentioned items as they did not fall under the category of specified capital goods or inputs for such goods. However, for other items, the appellants were directed to provide necessary details and documentary evidence to establish their eligibility for cenvat credit, as this information was lacking before. The Tribunal decided to remand the matter to the lower appellate authority for a fresh decision on the remaining items, granting the appellants a second chance to justify their claim and produce relevant documents for consideration.

Therefore, the appeal was allowed by way of remand, with the denial of credit upheld for Steel structures, gas compressors, and spring blade belts. The operative part of the Order was dictated and pronounced in the open Court on 20.04.11. The appellants were instructed to be given an adequate opportunity of hearing, including the chance to present documents supporting their claim for cenvat credit for the remaining items, as part of the fresh decision-making process by the lower appellate authority.