2014 (7) TMI 982 - AT - Central Excise

Suppression of facts - extended period of limitation - Cenvat Credit - capital goods - goods falling under chapter 84 - doors, false ceiling, compactor for document keeping, sheets for roofing, flooring for finished goods storage area, tube light fittings, etc. - The issue of admissibility of Cenvat Credit on certain items and support structures was the subject matter of litigations between the manufacturers and the department. Conflicting views were being expressed by various courts as claimed by the appellant before the first appellate authority. The issue on admissibility of such items was finally decided by the Larger Bench in the case of M/s. Vandana Global Limited Vs. CCE, Raipur (2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)). In the realm of conflicting interpretations given by various benches of CESTAT and other courts, it cannot be held that there was any suppression / misstatement on the part of the appellant with intention to evade any duty. - extended period cannot be invoked. - Decided in favor of assessee.

Summary

Issues:
Admissibility of Cenvat Credit on disputed items under Rule 2(a)(A) of the Cenvat Credit Rules, 2004. Time bar for demand show cause notice issuance.

Analysis:
The appellant filed an appeal against the order confirming a Cenvat Credit demand of Rs. 3,44,164 along with interest and penalty. The appellant argued that the disputed items, classified under Chapter 84, qualify as capital goods under Rule 2(a)(A) of the Cenvat Credit Rules, 2004. The appellant contended that the items were used in a room for specific manufacturing processes, justifying their eligibility for Cenvat Credit. The appellant claimed that the show cause notice issued was time-barred, citing the demand period from June 2006 to April 2008. The appellant referenced conflicting court opinions on the admissibility of Cenvat Credit on the disputed items, emphasizing the need for clarity provided by the Larger Bench judgment in a specific case.

The revenue representative argued against granting Cenvat Credit on items like flame proof well glass, tube light fittings, and sheet profiles, claiming they did not fall under the definition of capital goods in Rule 2(a)(A) of the Cenvat Credit Rules, 2004. The revenue supported the lower authorities' decision to deny the credit on these items.

Upon reviewing the case records and arguments from both sides, the Tribunal observed that the demand period was from June 2006 to April 2008, focusing on the admissibility of Cenvat Credit on various items like doors, false ceiling, and tube light fittings. The Tribunal noted the litigations surrounding the issue of admissibility of such items and the conflicting interpretations by different courts. The Tribunal highlighted the significance of the Larger Bench decision in providing clarity on the matter. In the absence of evidence indicating intent to evade duty, the Tribunal concluded that the extended period could not be invoked. Consequently, the Tribunal allowed the appeal solely on the grounds of the time bar for issuing the demand show cause notice.

In the final judgment, the Tribunal allowed the appellant's appeal based on the limitation issue, indicating that the demand show cause notice had been issued beyond the permissible one-year period from the date of taking Cenvat Credit.