2016 (9) TMI 37 - AT - Central Excise

Extended period of limitation of five years - time barred demand - admissibility of Cenvat credit - MS Channels/Beams/Joists which are used for making support structures for the machinery/capital goods - Held that - there were conflicting views given by the courts, during the relevant period, regarding admissibility of Cenvat Credit on the impugned items which was decided only by the larger Bench in the case of Vandana Global Ltd. v. CCE, Raipur 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) . Appellant, therefore, had a bona fide belief that Cenvat Credit on disputed items was admissible. In the light of the above observations and the settled proposition of law it is held that extended period of five years is not applicable in the present case. - Decided in favour of appellant

Summary

Issues involved:
1. Admissibility of Cenvat Credit on MS Channels/Beams/Joists for support structures
2. Applicability of extended period for demand

Analysis:
Issue 1: Admissibility of Cenvat Credit on MS Channels/Beams/Joists for support structures
The Appellant contested the rejection of Cenvat Credit amounting to Rupees 1,19,326, emphasizing conflicting views on the issue's admissibility until the resolution by a larger Bench decision in Vandana Global Ltd. v. Commr. C.Ex., Raipur. The Appellant argued against invoking the extended period and imposing penalties due to the conflicting court views and the resolution only in 2010. The Appellant relied on various case laws to support their stance. The Appellant also cited the Gujarat High Court's decision in Commissioner of C.Ex., Cus. & ST, Daman v. N.R.Agarwal Industries, stating that the extended period cannot be invoked when the belief in admissibility was bona fide.

Issue 2: Applicability of extended period for demand
The Revenue contended that the extended period of limitation applies, referring to the Hon'ble Allahabad High Court's decision in Bajaj Hindusthan Ltd. Union of India. The Revenue argued that as penalty under Section 11AC of the Central Excise Act, 1944 was applicable in similar cases, the extended period should also apply in the present proceedings. After hearing both sides and examining the case records, the Tribunal observed conflicting views on the admissibility of Cenvat Credit on the disputed items until the larger Bench decision in Vandana Global Ltd. v. CCE, Raipur. Considering the conflicting views during the relevant period and the Appellant's bona fide belief in the admissibility of the credit, the Tribunal held that the extended period of five years is not applicable in this case. Consequently, the Appeal was allowed, and the Order-in-Appeal dated 23.08.2013 was set aside.