2013 (11) TMI 913 - AT - Service Tax

Cenvat Credit - Whether the credit can be allowed in respect of goods like angles, joists, beam, channels, bars, flats which go into fabrication of such structures and plant - Held that - The Section 37(2) refers to credit of duty paid on goods used in, or in relation to the manufacture of excisable goods. Hence, capital goods defined in the CENVAT Credit Rules in the context of providing credit of duty paid, have to be excisable goods. - Goods like cement and steel items used for laying foundation and for building supporting structures cannot be treated either as inputs for capital goods or as inputs in relation to the final products and therefore, no credit of duty paid on the same can be allowed under the CENVAT Credit Rules for the impugned period - Following decision of Vandana Globals Vs. C.C. Ex, Raipur 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) - Prima facie case not in favour of assessee - Decided against assessee.

Summary

Issues: Application for waiver of pre-deposit of Cenvat Credit and penalty under Rule 15(1) of the Cenvat Credit Rules, 2004.

Analysis:
1. The applicant, a service provider engaged in washing coals, used MS Angles/Bars/Beams in the erection of conveyor belt and washery chamber, treating them as capital goods under Rule 2(a) of Cenvat Credit Rules, 2004. A show cause notice was issued disputing this classification, demanding recovery of CENVAT Credit for the period April to September, 2008. The applicant contended that most of the demand was time-barred, with only around Rs.23,000 being relevant for the normal period. The applicant offered to deposit Rs.25,000 of Cenvat Credit.

2. The Revenue, represented by the Ld. A.R., supported the findings of the Ld. Commissioner (Appeals).

3. After hearing both sides and examining the records, it was noted that the demand was received by the applicant on 31st October, 2009, which was beyond the normal limitation period. The Tribunal had consistently allowed petitions unconditionally in cases involving demands beyond the normal limitation period and concerning the availment of Cenvat Credit on items like Angles, Channels, Beams used as capital goods. Referring to the principles laid down by the Larger Bench of the Tribunal in the case of Vandana Globals Vs. C.C. Ex, Raipur, the Tribunal directed the applicant to make a pre-deposit of Rs.25,000 within four weeks. Compliance was to be reported by 12th July, 2013, and on compliance, the balance amount of dues would be waived, with recovery stayed during the appeal's pendency. The matter was disposed of accordingly.