2014 (1) TMI 156 - AT - Central Excise

Denial of cenvat credit - Rubber sheets and seals quantified as capital goods under Rule 2(a)(A) of cenvat credit rules, 2004 or not - Waiver of Pre-deposit Held that - As per the definition, components/spares /accessories of the goods are also capital goods - Storage tank is also a capital goods but its components /spares/accessories cannot be regarded as capital goods inasmuch as these items were not so specified in the legislative wisdom - the CENVAT register containing specific mention of rubber sheets and seals has been filed with the monthly returns but he fails to substantiate this claim appellant is not able to establish prima facie case in their favour appellant is directed to submit full amount as pre-deposit stay not granted.

Summary

Issues: Delay in filing appeals, denial of CENVAT credits on rubber sheets and seals, classification of rubber sheets and seals as capital goods, limitation plea, financial hardships plea.

In this judgment by the Appellate Tribunal CESTAT BANGALORE, the issue of a 3-day delay in filing appeals was addressed, with the delay being satisfactorily explained, leading to the allowance of two COD applications. The main contention revolved around the denial of CENVAT credits on rubber sheets and seals for the period from December 2007 to February 2010. The appellant argued that these items qualified as capital goods under Rule 2(a)(A) of the CENVAT Credit Rules, 2004, as spares and accessories of storage tanks. The appellant also raised a limitation plea, claiming that the availment of CENVAT credit on these items was discernible from the periodical returns and CENVAT registers filed. However, the tribunal found no prima facie case for the appellant on merits or limitation grounds. The lower authorities had classified capital goods as per the legislative definition, which did not include the components/spares/accessories of storage tanks. The tribunal rejected the appellant's argument against legislative wisdom and lack of evidence supporting the limitation plea.

Regarding financial hardships, the appellant failed to establish a prima facie case and did not provide evidence of financial constraints. The tribunal directed the appellant to deposit the entire amount of CENVAT credit within six weeks and report compliance to the Deputy Registrar by a specified date. Upon compliance, waiver and stay were granted concerning penalties imposed on the appellant and interest on duty. The judgment emphasized the importance of substantiating claims with evidence and complying with directives within the specified timeline to benefit from waivers and stays on penalties and interest.