2014 (1) TMI 420 - AT - Central Excise

Cenvat credit on MS plates, channels, sheets, angles - Goods used for Fabrication of storage tanks and columns of Atmospheric Suction Unit plant - Capital goods as per Rule 2(a)(A) (iii) of the CENVAT Credit Rules, 2004 Waiver of Pre-deposit Held that - The focus was on time-bar - The counsel has submitted that only an amount of Rs.6 lakhs can be demanded for the normal period - the appellant can pre-deposit an amount of Rs.10 lakhs for the present purpose the offer made by the appellant accepted and the appellant directed to pre-deposit the amount of Rupees ten lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
1. Whether steel items used for fabricating storage tanks and columns qualify as capital goods for CENVAT credit.
2. Whether the demand for recovery of CENVAT credit taken during a specific period is time-barred.

Analysis:

Issue 1:
The appellant sought waiver and stay regarding the recovery of CENVAT credit amounting to Rs.77,90,998/- for the period from February 2007 to November 2008 on steel items used for fabricating storage tanks and columns of an Atmospheric Suction Unit plant. The appellant argued that these items qualify as capital goods under Rule 2(a)(A) of the CENVAT Credit Rules, 2004. The Department contended that the items were used for fabricating structural support to plant and machinery, not as capital goods. The appellant's counsel asserted that both storage tanks and columns should be considered capital goods, making the steel items used for fabrication eligible for CENVAT credit. The counsel argued that the columns were integral to the manufacturing process of gases, thus meeting the criteria for capital goods. Additionally, the appellant claimed that the demand was time-barred as the show-cause notice lacked valid reasons for invoking the extended period of limitation and no deliberate suppression of information occurred to claim undue credit.

Issue 2:
The focus of the judgment centered on the time-bar aspect of the demand. The appellant's counsel acknowledged that only Rs.6 lakhs could be demanded for the normal period but offered to predeposit Rs.10 lakhs within six weeks to address the current issue. The Tribunal accepted this offer, directing the appellant to comply with the predeposit and report to the Deputy Registrar by a specified date. Subject to this compliance, waiver and stay were granted for the remaining dues. The decision highlighted the importance of timely compliance with predeposit requirements to secure relief in such matters.

This judgment from the Appellate Tribunal CESTAT Bangalore addressed the classification of steel items used for fabricating storage tanks and columns as capital goods for CENVAT credit purposes and examined the time-bar aspect of the demand, emphasizing the significance of compliance with predeposit conditions for obtaining relief in such cases.