2017 (9) TMI 1990 - AT - Central Excise

CENVAT Credit - inputs/capital goods - Cement and Asbestos sheet - credit denied on the ground that these are neither input nor capital goods in terms of Rule 2(k) or Rule 2(a) of the Cenvat Credit Rules, 2004 during the period September, 2009 to April, 2010 whereas show cause notice has been issued on 23.09.2011 - extended period of limitation - HELD THAT - Considering the facts that the issue of availment of cenvat credit on these goods was in dispute and the same has been resolved by the Larger Bench of this Tribunal in the case of VANDANA GLOBAL LTD. VERSUS CCE 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) . In that circumstances, extended period of limitation is not invokable. In the similar facts in the case of M/S. KM SUGAR MILLS LTD. VERSUS CCE ST, ALLAHABAD 2014 (11) TMI 1084 - CESTAT NEW DELHI this Tribunal held that in such circumstances the extended period of limitation is not invokable - Admittedly, the show cause notice has been issued in the matter by invoking extended period of limitation. In that circumstances, the show cause notice is barred by limitation. The appeal is allowed.

Summary

Issues:
1. Denial of cenvat credit on Cement and Asbestos sheet
2. Applicability of Rule 2(k) and Rule 2(a) of the Cenvat Credit Rules, 2004
3. Invocation of extended period of limitation for issuing show cause notice

Analysis:

1. The appellant contested the denial of cenvat credit on Cement and Asbestos sheet, arguing that these goods qualify as inputs or capital goods under Rule 2(k) or Rule 2(a) of the Cenvat Credit Rules, 2004. The impugned order had disallowed the credit based on this premise, despite the appellant's contention.

2. The Tribunal considered the dispute regarding the availment of cenvat credit on the mentioned goods and referenced a prior ruling by the Larger Bench in the case of Vadana Global Ltd. The Tribunal held that the extended period of limitation could not be invoked in such circumstances, as established by the case of K.M. Sugar Mills Ltd. The show cause notice in this matter was issued using the extended period of limitation, leading to the conclusion that it was barred by limitation.

3. Consequently, the Tribunal found the duty demands against the appellant to be unsustainable due to the show cause notice being time-barred. As a result, the impugned order was set aside, and the appeal was allowed with any consequential relief deemed appropriate. The judgment was dictated and pronounced in open court by the Tribunal Member (Judicial), Mr. Ashok Jindal.