2014 (11) TMI 74 - AT - Central Excise

Admissibility of cenvat credit - Invocation of extended period of limitation - Held that - there is no specific mention of elements; suggesting fraud wilful misstatement etc., with intention to evade payment of duty; in the show cause notice. admissibility of cenvat credit on items used for erecting support structure of capital goods was a disputed issue on which different interpretations were being given by courts. The issue was finally settled by CESTAT Larger bench in the case of Vandana Global Ltd 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) . Respondent had thus a bonafide belief that such credit was admissible. All the credit entries and the cenvatable documents were available with the Respondents which were examined by Internal Audit parties but only Local Audit party could raise the objection. In the above factual matrix of the facts extended period cannot be made applicable to the present case - Decided against Revenue.

Summary

Issues involved:
1. Invocation of extended period for cenvat credit admissibility.
2. Interpretation of legal provisions regarding the use of certain items for erecting structures of plant and machinery.

Issue 1: Invocation of extended period for cenvat credit admissibility:

The appeal filed by the Revenue was against the order passed by the first appellate authority, which allowed the appeal by holding that the extended period cannot be invoked in the proceedings. The Revenue argued that under the self-removal procedure, the onus is on the respondents to prove the correct cenvat credit admissible to them. It was contended that inadmissibility of credit on certain items was detected by the local Audit Party, justifying the invocation of the extended period. The Respondent, on the other hand, maintained that all records and credit documents were correctly maintained and available for inspection. They cited legal precedents emphasizing that mere omission to provide correct information does not constitute suppression of facts unless deliberate to evade duty. The Respondent also highlighted conflicting interpretations by different courts on the issue of admissibility of cenvat credit on disputed items, asserting a bonafide belief in the credit's admissibility. The Tribunal, after considering the arguments and case laws, held that the extended period cannot be applied in this case, ultimately rejecting the Revenue's appeal.

Issue 2: Interpretation of legal provisions regarding the use of certain items for erecting structures of plant and machinery:

The case involved the use of certain items for erecting the structure of plant and machinery, with the Respondent arguing that such goods were capital goods covered under the cenvat scheme. The first appellate authority extensively discussed that the show cause notice lacked specific elements suggesting fraud or willful misstatement to evade duty, citing legal precedents to support the non-invocation of the extended period. The issue of admissibility of cenvat credit on items used for erecting support structures of capital goods was a disputed matter with varying interpretations by courts. The Tribunal referred to a CESTAT Larger Bench judgment that settled the issue, emphasizing that the Respondent had a bonafide belief in the admissibility of the credit. The Tribunal concluded that the extended period was not applicable in this case, aligning with the first appellate authority's decision. The appeal filed by the Revenue was rejected, providing consequential relief to the Respondent.

In summary, the judgment delved into the invocation of the extended period for cenvat credit admissibility and the interpretation of legal provisions concerning the use of items for erecting structures of plant and machinery. The Tribunal, after considering arguments, case laws, and the factual matrix, upheld the first appellate authority's decision, rejecting the Revenue's appeal and providing relief to the Respondent.