2015 (11) TMI 461 - AT - Central Excise

Denial of CENVAT Credit - Misdeclaration of goods - credit on various items of Chapter 72 and 73 in the guise of capital goods - Held that - according to appellant various items of iron & steel were used for manufacture of supporing structures and foundation of the main paint shops. The main machines are rested on these structures in different floor without which the processes in the machines cannot function. - there is no definite finding on this issue - Matter remanded bact. Cenvat credit on input services - services received by him for use in or in relation to manufacture of the final product including the services used in relation to setting up of the plant. - Held that - It is not in dispute that M/s. Tata Motors received the impugned services for the aforesaid purpose. - during the relevant period, the CENVAT Credit Rules did not preclude a manufacturer to take the credit at a later date in respect of the impugned services already received by them. Revenue s sole ground for denying the credit is that the appellant could not have utilized the impugned services for manufacture of the final product (as they dismantled their plant at Singur). We are of the opinion that as the input services were received by M/s. Tata Motors at Singur for manufacture of the final products, the said unit is eligible to take credit in terms of Rule 3 of CENVAT Credit Rules, 2004 read with Rule 2 (l) of the said Rules. - Tata Motors, Singur has taken the CENVAT Credit correctly on the input services - Matter remanded back - Decided in favour of assessee.

Summary

Issues involved:
1. Whether certain iron and steel items can be considered as capital goods for availing CENVAT credit.
2. Whether the appellant correctly availed CENVAT credit on input services.

Detailed Analysis:

Issue 1:
The appellant applied for Central Excise Registration to manufacture excisable goods, including items from Chapter Heading 72 and 73, treating them as capital goods. The show cause notice alleged irregular credit on these items, stating they were immovable property and not excisable goods. The appellant argued that these items were used for supporting structures integral to the main paint shop's machinery. The Tribunal found a lack of a definite finding on this issue and remitted it to the adjudicating authority for verification, along with examining the issue of limitation. The Revenue contended that these items were not capital goods based on a previous judgment. The Tribunal directed a fresh examination by the adjudicating authority.

Issue 2:
The appellant also claimed CENVAT credit on input services received before the decision to shift operations. The Revenue argued that since the plant was dismantled, the credit was not eligible. The Tribunal found that the services were used for manufacturing final products before the plant's dismantling, making the appellant eligible for credit. The Tribunal held that during the relevant period, there was no restriction on taking credit at a later date for services already received. The case was remitted to the Commissioner to decide the eligibility of credit on iron and steel items based on evidence. The Tribunal upheld the appellant's correct availing of CENVAT credit on input services, directing a fresh decision on the iron and steel items' credit eligibility.

In conclusion, the Tribunal remitted the issue of iron and steel items to the adjudicating authority for verification and directed a fresh decision on the eligibility of credit. The Tribunal upheld the appellant's correct availing of CENVAT credit on input services, remitting the case to the Commissioner for a fresh decision based on evidence.