2013 (2) TMI 465 - AT - Central Excise

CENVAT Credit - Capital goods rule 2(a) of the CENVAT Credit Rules 2004 - Whether CENVAT credit was admissible of G.C. Sheets/G.P. Sheets Assessee claimed these are components/spares/accessories of the cement mill The effect that the sheets had been used in the Kiln Feed GCT and Kiln ESP Gas Dedusting and also for increasing the storage space in the Storage Yard - AO argued that the sheets had been used for replacing of the roof over the cement mill - Held that - Question to be settled in this case is on a fact and the same is as to the manner of use of the G.C./G.P. Sheets. Therefore it is not possible to identify any nexus between such finding and the case law discussed in the impugned order. Therefore, appeal remand with a direction to the original authority to take fresh decision on the substantive issue after giving the assessee one more opportunity to substantiate their claim and after physical inspection of Plant and Machinery if deemed necessary. Remand back to AO

Summary

Issues:
1. Admissibility of CENVAT credit for G.C./G.P. Sheets as components/spares/accessories of the cement mill.

Analysis:
1. The original authority denied CENVAT credit to the respondent for G.C./G.P. Sheets, stating they were used for replacing roofing material over the cement mill and did not qualify as capital goods under CENVAT Credit Rules-2004.
2. The respondent failed to provide evidence supporting their claim that the sheets were components/spares/accessories of pollution control equipment or capital goods under specific chapters, leading to confirmation of the demand.
3. The appellate authority found that the sheets were used for repair and maintenance of capital goods in the factory, allowing the credit claimed by the respondent.
4. The appellant attempted to distinguish cases cited in the impugned order and relied on a larger Bench decision, but the fundamental issue remained the manner of use of the sheets.
5. The respondent's lack of specific plea regarding the use of the sheets before the adjudicating authority hindered a proper decision, with conflicting claims made before the appellate authority.
6. The judgment allowed the appeal by remanding the case for a fresh decision by the original authority, emphasizing the need for the respondent to substantiate their claim with physical inspection if necessary and ensuring a reasonable opportunity for the party to be heard.

This detailed analysis highlights the key points of the legal judgment regarding the admissibility of CENVAT credit for G.C./G.P. Sheets and the subsequent decisions made by the authorities involved in the case.