2014 (2) TMI 529 - AT - Service Tax

Denial of CENVAT Credit - Availment of CENVAT credit on MS Channels, MS Plates and HR Coils etc. used in the newly constructed Block by the appellant - Held that - appellant has deposited 50% of the duty demanded as per the stay order passed by the Commissioner (Appeals). Since this Tribunal has been taking a view that extended period may not be invokable in all cases of availment of CENVAT credit on MS Channels, Angles & Beams etc., appellants can be said to have made out a case in their favour against demand beyond the normal time limit. Accordingly, we consider that the amount already deposited by the appellant as per the stay order passed by the Commissioner (Appeals) is sufficient - Stay granted.

Summary

Issues:
1. Admissibility of CENVAT credit on MS Channels, MS Plates, and HR Coils used in the newly constructed block by the appellant.
2. Time-barred demand for a substantial portion of the CENVAT credit availed during 2007-08 and 2008-09.

Admissibility of CENVAT Credit:
The appellant, engaged in manufacturing bulk drugs and intermediaries, faced proceedings questioning the admissibility of CENVAT credit amounting to Rs. 14,13,992/- for the years 2007-08 and 2008-09. The dispute centered around the usage of MS Channels, MS Plates, and HR Coils in the construction of a new block. The appellant contended that only a portion of these items were utilized in support structures, implying that the credit availed was justified. The Tribunal acknowledged the appellant's argument and noted that the extended period for demand might not apply universally to cases involving CENVAT credit on such materials. Consequently, the Tribunal deemed the amount already deposited by the appellant, as per the Commissioner (Appeals) stay order, sufficient for the appeal proceedings. As a result, the requirement for further predeposit of the balance amount, interest, and penalty was waived, with a stay against recovery granted during the appeal's pendency.

Time-Barred Demand:
Regarding the time-barred aspect of the demand, the appellant highlighted that a significant portion of the demand fell beyond the one-year limit. The Tribunal recognized this contention and, in line with its stance on the applicability of the extended period for CENVAT credit cases involving MS Channels, Angles, and Beams, found merit in the appellant's argument. Consequently, the Tribunal concluded that the appellant had presented a case favoring them against demands exceeding the normal time limit. This acknowledgment further supported the decision to waive the predeposit requirement for the remaining amount, interest, and penalty, with a stay against recovery granted for the duration of the appeal process.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT Bangalore highlights the issues surrounding the admissibility of CENVAT credit and the time-barred nature of the demand, providing a comprehensive understanding of the Tribunal's decision and reasoning.