2015 (12) TMI 938 - AT - Central Excise

Denial of CENVAT Credit - Capital goods - HR sheets, HR plates, MS pipes, MS Flat, joist, pate mill pate, MS square, MS channel, MS TMT bar, MS beam, plate, steel pipe, MS tube, pipes and tubes, G I pipe, HSM plate etc. - Held that - Cenvat credit is sought to be denied on the items mentioned on the premise that these items were used as structurals items, the usage of which items has been explained by the respondents in reply to the show cause notice and same has been recorded by the adjudicating authority but same has not been controverted by the adjudicating authority with cogent evidence and denied the Cenvat credit on the ground that respondent has not provided drawings and design but nowhere from the said order it is coming out that adjudicating authority has asked to show these documents from the respondents during the course of hearing. Therefore, evidence provided by the respondent before learned Commissioner (Appeals) for consideration are admissible as per Rule 5 (4) of the Central Excise (Appeals) rules, 2001. In these circumstances, learned Commissioner (Appeals) has considered the usage of all items and thereafter arrived at the decision that these items have been used in manufacturing or repair and maintenance of capital goods. Therefore, I do not find any infirmity in the impugned order - Decided against Revenue.

Summary

Issues:
- Denial of Cenvat credit on structural items used in manufacturing
- Admissibility of additional evidence before the Commissioner (Appeals)
- Interpretation of Rule 5 of Central Excise (Appeals) Rules, 2001

Analysis:
1. The appeal involved the denial of Cenvat credit on structural items used in manufacturing ferro alloys by the respondent. The Revenue contended that these items were not capital goods and, therefore, the Cenvat credit should be disallowed based on the decision in Vandana Global Ltd. The respondent argued that the items were used in manufacturing or repair of capital goods, providing explanations and evidence of their usage.

2. The admissibility of additional evidence before the Commissioner (Appeals) was a crucial issue. The Revenue objected to the consideration of new evidence, citing Rule 5 of Central Excise (Appeals) Rules, 2001. However, the respondent submitted drawings and a certificate from a Chartered Accountant before the Commissioner (Appeals), supporting their claim for Cenvat credit based on the usage of the items in question.

3. The interpretation of Rule 5 of Central Excise (Appeals) Rules, 2001 was pivotal in the judgment. The Tribunal found that the evidence provided by the respondent before the Commissioner (Appeals) was admissible under Rule 5(4) of the said rules. The Commissioner (Appeals) considered the usage of the items and concluded that they were indeed used in manufacturing or repair and maintenance of capital goods, thus upholding the respondent's claim for Cenvat credit.

4. Ultimately, the Tribunal upheld the decision of the Commissioner (Appeals), dismissing the appeal filed by the Revenue. It was determined that the adjudicating authority had not requested the drawings and designs during the hearing, making the evidence provided by the respondent permissible. The judgment emphasized the importance of considering all relevant evidence and usage of items in determining eligibility for Cenvat credit.