2014 (9) TMI 68 - AT - Central Excise

Benefit of CENVAT credit - Non filing of declaration - fabrication of capital goods - Held that - non-filing by itself will not result in denial of credit. One such reference can be made to the decision of Hon ble High Court of Madras in the case of CCE, Chennai Vs. ITC Ltd. 2007 (11) TMI 188 - HIGH COURT MADRAS . In any case, I find that the appellants had actually filed the declaration in March, 2000 and it is not the case of non-filing of declaration, but a case of late filing of declaration, if at all. As per the appellants in as much as they got themselves registered in March, 2000 only, they could not have filed the 57-T declaration prior to getting registered themselves. In any case, I find that in the absence of dispute of receipt of capital goods in the appellants factory, their are duty paid character and use in the manufacture of final product, denial of substantive credit on the basis of alleged provision infractious cannot be upheld. As regards the doubt about the use of some of the parts in the fabrication of the capital goods - matter remanded back - Decided in favour of assessee.

Summary

Issues involved:
Denial of CENVAT credit on grounds of late filing of declaration under Rule 57-T, non-installation of capital goods, and lack of evidence regarding use of certain parts in fabrication of capital goods.

Analysis:
1. Late Filing of Declaration under Rule 57-T:
The appellants were denied CENVAT credit due to late filing of the declaration under Rule 57-T. The Commissioner (Appeals) acknowledged that the appellants filed the declaration after receiving the capital goods, citing their registration date as the reason for the delay. The judgment referred to previous rulings, including a case from the High Court of Madras, emphasizing that late filing alone should not lead to credit denial. The Tribunal concurred that the delay in filing did not negate the appellants' entitlement to credit, especially considering the absence of disputes regarding the receipt, duty payment, and use of the capital goods in manufacturing.

2. Non-Installation of Capital Goods:
The issue of whether installation of capital goods was a prerequisite for availing the remaining 50% of CENVAT credit was addressed. The Commissioner (Appeals) ruled in favor of the appellants, stating that installation was not a legal requirement for claiming the credit. The Tribunal upheld this decision, emphasizing that the appellants' compliance with the installation condition was not mandatory for credit eligibility.

3. Use of Parts in Fabrication:
Regarding the utilization of certain parts in fabricating capital goods, the Commissioner (Appeals) rejected the credit due to lack of evidence supporting the appellants' claim that the parts were machined in their factory to fit into the capital goods. The Tribunal deemed it necessary to remand the matter to the original adjudicating authority for further examination and verification of the factual aspect. The Tribunal emphasized the importance of substantiating claims with evidence, highlighting the need for a thorough investigation before making a final decision on the credit eligibility based on the use of specific parts.

In conclusion, the Tribunal disposed of all three appeals, directing the original adjudicating authority to quantitatively decide the matter based on the outlined observations and findings. The appellants were granted the opportunity to present their case before the authority, ensuring a fair and comprehensive resolution of the issues at hand.