2015 (10) TMI 1686 - AT - Central Excise

Admissibility of CENVAT Credit - Capital goods - Invocation of extended period of limitation - Held that - Once a certificate from an appropriate and competent authority has been furnished by the Appellant, then it is not open to the Adjudicating authority to question that certificate unless another opinion from an expert is obtained which is contrary to the certificate given by the Appellant. The stand of the Appellant before the Adjudicating authority right from the beginning is that the inputs are used in the manufacture of the capital goods. There is no evidence on record that the use of such inputs was made by the Appellant in creation of support structures for the machinery. The claim of the Appellant is supported by the Chartered Engineer s certificate and therefore, the CENVAT Credit of input used in the manufacture of capital goods, cannot be denied - In view of the confusion on the issue, Appellant had a bonafide belief that credit on the inputs was admissible and the extended period cannot be invoked as the same issue was settled by the Larger Bench judgment in the case of Vandana Global Ltd Vs CCE Raipur (2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)). Under the circumstances, the extended period cannot be invoked against the Appellant and no penalty can be imposed under Section 11AC of Central Excise Act, 1944. - Decided in favour of assessee.

Summary

Issues involved:
Admissibility of CENVAT Credit on items like C.S. Bars, M.S. Channels/Angles/Plates, HR Coils/Steel Plates under CENVAT Credit Rules, 2004. Time bar aspect regarding the period of dispute.

Analysis:
1. Admissibility of CENVAT Credit:
The appeal concerned the admissibility of CENVAT Credit on specific items used in the factory premises. The Appellant argued that the items were used in manufacturing capital goods and relied on case law to support their claim. They presented a certificate from a Chartered Engineer confirming the use of materials in the manufacture of capital goods, not for support structures. The Adjudicating authority was bound by the certificate unless an opposing expert opinion was obtained. The Appellant's consistent stance and the Chartered Engineer's certificate supported their claim, making the CENVAT Credit eligible as per Rule 2(k) of CENVAT Credit Rules, 2004.

2. Time Bar Aspect:
Regarding the time bar aspect, it was noted that the issue of CENVAT Credit admissibility was disputable until settled by a CESTAT Larger Bench judgment. The Appellant, relying on favorable judgments and the confusion surrounding the issue, had a genuine belief in the admissibility of the credit. As the matter was resolved by the Larger Bench judgment, the extended period could not be invoked against the Appellant. Consequently, no penalty could be imposed under Section 11AC of the Central Excise Act, 1944. The show cause notice received by the Appellant was deemed time-barred, as it was issued after the relevant period of dispute.

In conclusion, the Appellant's appeal was allowed on both merits and the time bar aspect, based on the arguments presented and the legal precedents cited.