2015 (10) TMI 1689 - AT - Central Excise

Admissibility of CENVAT Credit - Capital goods - Invocation of extended period of limitation - Held that - Issue was finally resolved by the Larger Bench in the case of Vandana Global Ltd Vs CCE Raipur (2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)). Under this case law, published in 2010, it was held that the CENVAT Credit on inputs used in the making of support structures for capital goods is not admissible. As the issue of admissibility of CENVAT Credit on these items in the manufacture in the present proceedings was disputable and different opinions were given by CESTAT and Courts, extended period of limitation for demanding duty is not applicable. Appellant has correctly relied upon the judgment of Megafine Pharma Ltd Vs CCE & ST, Daman (2014 (7) TMI 982 - CESTAT AHMEDABAD) to argue that the extended period is not invokable. - extended period cannot be invoked in situations for an earlier period where a part of dispute is subsequently decided by the Larger Bench of the CESTAT. The very fact that the issue is decided in 2010 by Larger Bench in the case of Vandana Global Ltd Vs CCE Raipur (supra) clearly convey that there was a confusion in the mind of the manufacturers regarding the admissibility of CENVAT Credit on disputed items. Appellant did not had any intention to evade payment of duty and accordingly, the extended period is not invokable. - Decided in favour of assessee.

Summary

Issues:
Admissibility of CENVAT Credit on specific items used in fabrication, Time bar for demanding duty.

Analysis:

Admissibility of CENVAT Credit:
The appeal involved the admissibility of CENVAT Credit on various items like S.S. Sheets, Plates, Joists, Channels, Coils, M.S. Angles, H.R. Coils, M.S. Plates, Flanges used in the fabrication of storage tanks and support structures. The Appellant argued that these items qualified as inputs under Rule 2(k) of CENVAT Credit Rules, 2004, citing relevant case law. The Appellant also contended that the amendment to Rule 2(k) was not retrospective based on a judgment by the Hon'ble Gujarat High Court. The issue was considered debatable, and the Appellant asserted that the extended period for demanding duty was not applicable, referencing a relevant case law. The Revenue, however, argued against the admissibility of CENVAT Credit on these items, stating they were used for support structures for machinery.

Time Bar for Demanding Duty:
The show cause notice for demanding duty was issued after a significant period from the relevant period (2005-2009), leading to a contention on the application of the extended period for invoking duty demand. The Appellant argued that the notice was time-barred, relying on case law to support their stance. The Revenue, on the other hand, cited a different case law to argue for the applicability of the extended period based on the specific circumstances of the case.

Judgment:
After hearing both sides and examining the case records, the Tribunal considered the conflicting interpretations on the admissibility of CENVAT Credit on the disputed items. The Tribunal highlighted a case law that supported the Appellant's argument against invoking the extended period for demanding duty. It was noted that the issue had been resolved by a Larger Bench decision in a specific case, indicating confusion among manufacturers regarding the admissibility of CENVAT Credit. Consequently, the Tribunal ruled in favor of the Appellant, holding that there was no intention to evade duty payment, and the extended period was not applicable in this case. As a result, the appeal was allowed based on the time bar issue without expressing any opinion on the merits of the case.