9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (8) TMI 346 - AT - Central ExciseDenial of Cenvat Credit on steel items such as MS plates, flats, pipes, sheets, rods, etc Held that - Adjudicating authority appears to have rightly relied on the apex court s judgment in Saraswati Sugar Mills case 2011 (8) TMI 4 - SUPREME COURT OF INDIA wherein it was clearly held that a structural support to any capital goods could not be considered as a part or component of such capital goods - prima facie view that CENVAT credit cannot be claimed by the appellant on the structural steel items used in the fabrication of structural support to raw mill, silo, packing plant, etc. and, therefore, the Commissioner s decision to deny CENVAT credit cannot be faulted Decided against the Assessee. Stay application Waiver of pre-deposit Held that - Entire demand being within the normal period of limitation, and there being no plea of financial hardships, the appellant directed to pre-deposit an amount of Rs.33,00,000/- (Rupees thirty three lakhs only) being the CENVAT credit prima facie deniable to them. They shall pre-deposit this amount within six weeks Decided against the Assessee.
Issues:
1. Denial of CENVAT credit on steel items used for fabricating structural support. 2. Interpretation of the definition of 'capital goods' under CENVAT Credit Rules, 2004. 3. Application of judgments in similar cases to the current scenario. 4. Amendment to the 2nd Explanation of the definition of 'input' under Rule 2(k) of the CCR, 2004. 5. Legislative intent behind the exclusion of certain materials from the CENVAT credit scheme. Analysis: Issue 1: Denial of CENVAT credit on steel items used for fabricating structural support: The appellant sought waiver of pre-deposit and stay of recovery for the denied CENVAT credit of Rs.1,06,75,491 on steel items used for structural support. The adjudicating authority denied credit for the period from April 2007 to June 2009 and from July 2009 to October 2010. The denial was based on the argument that the steel items were not covered under the definition of 'capital goods' as they were used for fabricating structural support to capital goods. The authority relied on previous judgments to support this decision. Issue 2: Interpretation of the definition of 'capital goods' under CENVAT Credit Rules, 2004: The appellant argued that the structural support should be considered as a component/part/accessory of the machinery, citing relevant judgments. They contended that the steel items used for structural support should be treated as 'capital goods.' The appellant highlighted conflicting decisions on the issue and argued that the right to claim CENVAT credit on structural steel items had accrued before the amendment to the 2nd Explanation of the 'input' definition. Issue 3: Application of judgments in similar cases to the current scenario: The appellant referenced various judgments where structural steel items were considered 'capital goods' for CENVAT credit purposes. They argued that the structural support should be deemed integral to the machinery, akin to the chimney in a previous case. The Commissioner (AR) reiterated the findings of the adjudicating authority, emphasizing the legislative intent to exclude certain materials from the CENVAT credit scheme. Issue 4: Amendment to the 2nd Explanation of the definition of 'input' under Rule 2(k) of the CCR, 2004: The appellant pointed out the amendment to the 2nd Explanation, excluding structural steel items from the definition of 'input.' They argued that the conflicting decisions on the issue should have allowed them to claim CENVAT credit on the steel items used for structural support. Issue 5: Legislative intent behind the exclusion of certain materials from the CENVAT credit scheme: The Commissioner (AR) supported the denial of CENVAT credit on structural steel items, emphasizing the retrospective nature of the amendment to the 2nd Explanation. The authority argued that the legislative intent was clear in excluding such materials from the credit scheme. In conclusion, the Tribunal upheld the denial of CENVAT credit on steel items used for fabricating structural support to certain machinery but allowed credit on pre-fabricated steel structures falling under Chapter 84 of the Tariff Schedule. The appellant was directed to pre-deposit a specified amount within a set timeframe, subject to which the waiver of pre-deposit and stay of recovery would apply to the remaining dues and penalties.
|
