2018 (7) TMI 2308 - AT - Central Excise

CENVAT Credit - capital goods - M.S.Plates - MS Sheets/Aluminium Coil - Joist/Square/joist Channel/HR Plates/Shapes Sections/ MS Channels - Angles - welding electrodes CRSS Patti/HRSS Plates/HR Coil/Sheets etc. - period 15.5.2006 to 31.3.2010 - Extended period of limitation - HELD THAT - There were divergent views by this Tribunal on the issue of availability of Cenvat credit on the items in question. Initially, the said issue has been settled by the larger bench of this Tribunal in the case of VANDANA GLOBAL LTD. VERSUS CCE 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) wherein it has been held that the Cenvat credit is not available to the appellant. As the said decision of the Larger Bench of this Tribunal in the case of Vandana Global Limited is also set aside by the Hon ble Chhattisgarh High Court in SCANIA STEELS AND POWERS LTD. VERSUS COMMISSIONER 2011 (9) TMI 972 - CHHATTISGARH HIGH COURT , in that circumstance, it is held that as the whole demand has been raised by invoking the extended period of limitation, the demand is not sustainable as barred by limitation. Appeal allowed.

Summary

Issues:
Appeal against denial of Cenvat credit on steel items as not capital goods; Divergent views on availability of Cenvat credit during the impugned period; Settlement by larger bench of Tribunal; Set aside decision by Chhattisgarh High Court; Demand raised invoking extended period of limitation.

Analysis:

1. The appellant appealed against the denial of Cenvat credit on steel items like M.S. Plates, MS Sheets/Aluminium Coil, Joist/Square/joist Channel/HR Plates/Shapes & Sections/ MS Channels, Angles, welding electrodes CRSS Patti/HRSS Plates/HR Coil/Sheets, claiming they are not capital goods under Rule 2(a) of Cenvat Credit Rules, 2004 for the period 15.5.2006 to 31.3.2010.

2. The Tribunal noted that during the relevant period, there were conflicting views on the availability of Cenvat credit on the items in question. Initially, the larger bench of the Tribunal in the case of Vandana Global Limited vs. CCE, Raipur-2010 held that Cenvat credit was not available. However, this decision was subsequently set aside by the Hon'ble Chhattisgarh High Court in 2011. Given the conflicting decisions and the fact that the demand was raised invoking the extended period of limitation, the Tribunal held that the demand was not sustainable as it was barred by limitation.

3. Therefore, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellant, if any. This decision was made based on the grounds of the conflicting views, the subsequent High Court ruling, and the limitation period within which the demand was raised.

This detailed analysis covers the issues of denial of Cenvat credit on steel items, the conflicting views during the relevant period, the settlement by the larger bench of the Tribunal, the subsequent decision by the Chhattisgarh High Court, and the sustainability of the demand raised within the extended period of limitation.