2016 (6) TMI 1056 - AT - Central Excise

Cenvat credit on steel structural items as capital goods - manufacture of inorganic chemicals, organic chemicals, and miscellaneous chemical products - Held that - The contention of the appellant that they availed credit on bonafide belief that it is admissible is not without substance, if one examines the chequered history of the issue under consideration. Apart from a bald allegation there is no evidence adduced by department to establish supression or mis-statement of facts. The relied upon documents as stated in the show cause notice itself, establishes that appellant is not guilty of suppression of facts or mis-statement. - Demand set aside - Decided in favor of assessee.

Summary

Issues Involved:
Admissibility of CENVAT credit on MS angles, plates, beams, channels used for supporting structures of boilers and reactors.

Detailed Analysis:

Issue 1: Time Barred Demand
The appellant argued that the demand is time-barred as they had disclosed the credit availed in their regular ER-1 returns. They contended that the MS items were used for erecting boilers and reactors, which was well-known to the department. The appellant believed the credit was admissible until a specific amendment. They cited judgments to support their position. The department invoked the extended period, alleging suppression. The AR argued that the credit is not admissible for support structures of capital goods. The Tribunal noted that the department scrutinized the returns in 2009, well beyond the normal period, without providing a reason for the delay. Considering the contentious nature of the issue and lack of evidence of suppression, the Tribunal held the demand as time-barred. The judgment in Ultratech Cement Ltd., Vs CCE, Raipur was cited to support this decision.

Issue 2: Admissibility of Credit
The AR contended that the credit is not admissible on items used for support structures of capital goods. He argued that reactors & boilers, being fastened to earth, are immovable property, making the credit inadmissible. The appellant had declared these items as capital goods but the AR claimed they did not qualify as such. The Tribunal observed that support structures are necessary for installing capital goods for manufacturing processes. The department relied on ER-1 returns and invoices to raise the demand. However, the Tribunal found no evidence of suppression or misstatement by the appellant. The appellant's belief in the admissibility of credit was considered valid given the historical context and previous judgments in their favor. The Tribunal concluded that the demand was not sustainable and allowed the appeal with consequential reliefs.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the demand was time-barred due to lack of evidence of suppression or misstatement. The judgment emphasized the importance of support structures for installing capital goods and the appellant's genuine belief in the admissibility of the credit. The decision provided relief to the appellant based on legal principles and precedents cited during the proceedings.