2015 (11) TMI 243 - AT - Central Excise

Denial of CENVAT Credit - Invocation of extended period of limitation - held that - Prior to reference of this Vandana Global Ltd case 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) to the Larger Bench of this Tribunal, in various judgments the Tribunal allowed the credit of structural steel item and thereafter one of the Division Bench of this Tribunal had contrary view and matter was referred to the Larger Bench. Under this position of law on the issue of Cenvat Credit in respect of structural steel items assessee had bonafide belief and rather bound by the judgment of this Tribunal wherein Cenvat Credit was allowed therefore it cannot be alleged that the appellant has suppressed the fact or any ingredient as provided under proviso to Section 11Ac is applicable in the fact and circumstances of the case. The case of N.R. Agarwal Industries 2014 (5) TMI 603 - GUJARAT HIGH COURT , Hon ble Gujarat High Court has held that longer period of limitation is not invokable in the case of Cenvat Credit availed in respect of goods namely Angles, Channels, Tubes Rails etc. In all other judgments cited by the Ld. Counsel, this Tribunal has taken consistent view that since admissibility of Cenvat credit in respect of structural steel items is an issue of interpretation of Cenvat Rules, therefore extended period of limitation is not invokable. - Decided in favour of assessee.

Summary

Issues:
1. Denial of Cenvat credit on steel material used for fabrication of platform.
2. Applicability of show cause notice invoking extended period.
3. Interpretation of Cenvat Rules regarding admissibility of Cenvat credit on structural steel items.

Analysis:
1. The appeal challenged the denial of Cenvat credit on steel material used for fabricating a platform for erecting reactors. The appellant contended that since the steel material was directly used in fabricating the platform and excise duty was paid on the platform, the Cenvat credit should be allowed. The appellant argued that the Larger Bench decision in the case of Vandana Global Ltd. was not applicable as the steel material was treated as input and directly used in the fabrication process. The appellant cited previous Tribunal judgments supporting the admissibility of Cenvat credit on similar goods. The Commissioner (Appeals) upheld the denial, leading to the appeal before the Tribunal.

2. The show cause notice invoked the extended period for demanding Cenvat credit, issued beyond the normal one-year period under the Central Excise Act, 1944. The appellant argued that due to conflicting judgments prior to the Vandana Global Ltd. case, there was a bona fide belief in availing the Cenvat credit on steel items. The Tribunal noted that the issue of Cenvat credit on structural steel items was a matter of interpretation of the Cenvat Rules. Citing the case of N.R. Agarwal Industries, the Tribunal held that the longer period of limitation was not applicable for Cenvat credit on items like Angles, Channels, Tubes, and Rails. Considering the consistent view of the Tribunal on the interpretation issue, the Tribunal concluded that the demand under the extended period was time-barred and set it aside, leading to the allowance of the appeal solely on the ground of time limitation.

3. The Tribunal's decision focused on the time-bar aspect due to the invocation of the extended period for demanding Cenvat credit, rendering the demand unsustainable. The judgment highlighted the importance of the interpretation of Cenvat Rules regarding the admissibility of credit on structural steel items and the impact of conflicting judgments on the appellant's belief in availing the credit. By setting aside the demand on grounds of time limitation, the Tribunal did not delve into the merits of the case concerning the denial of Cenvat credit, thereby allowing the appeal solely based on the time-bar issue.