2017 (2) TMI 763 - AT - Central Excise

Cenvat credit - Business Auxiliary Services - Held that - I find that the sole question required to be decided in the present appeal is as to whether goods claimed as capital goods are covered by the definition given in Rule 2(a) of Cenvat Credit Rules or as to whether the goods claimed as inputs stands actually used in the process of crushing of iron ore or so as to earn the Cenvat credit of duty paid on the same - Neither of the authorities below have examined the said issue vis- -vis the definition of capital goods or the use of the inputs. Rejection of the Chartered Engineer certificate on the simplicitor ground that the same relates to the purchase of the goods prior to the date of certificate cannot be appreciated, inasmuch as the certificate reflects upon the use of the goods and is not relatable to the date of purchase of the good - Appeal allowed by way of remand.

Summary

Issues:
- Availability of Cenvat Credit on various items
- Relevance of Chartered Engineer certificate
- Examination of goods as capital goods or inputs
- Grounds for setting aside the impugned order
- Consideration of limitation issue on show cause notice

Analysis:
The case involves a dispute regarding the availability of Cenvat Credit on items like Concave, Mantles, Omni Screen, Tata Hitachi Conveyor Belt, and others. The appellant, engaged in crushing iron ore lumps, faced a show cause notice seeking to deny Cenvat credit amounting to ?11,11,927 availed between October 2007 and March 2008. The notice did not specify reasons for denying credit, focusing on the definition of capital goods under Cenvat Credit Rules, 2004. The Adjudicating Authority and Commissioner (A) upheld the denial, disregarding a Chartered Engineer certificate submitted by the appellant certifying the usage of goods as capital goods or inputs.

The main issue for consideration was whether the goods claimed as capital goods fell under the Cenvat Credit Rules' definition or if the claimed inputs were genuinely used in the ore crushing process. The authorities failed to examine this crucial aspect, leading to the rejection of the certificate based solely on the purchase dates of the goods. The Tribunal highlighted the necessity to assess the actual usage of goods, emphasizing that the certificate's relevance lies in demonstrating usage rather than purchase dates. Therefore, the case was remanded to the original adjudicating authority for a fresh decision based on proper examination of the goods' nature and usage.

Additionally, the Tribunal acknowledged the advocate's acceptance that the show cause notice exceeded the limitation period but was not challenged on this ground earlier. However, the advocate requested consideration of the limitation issue, which was deemed a legal ground. As the matter was remanded, the original adjudicating authority was directed to address the limitation aspect along with reevaluating the Cenvat Credit availability. Consequently, the appeal was allowed for remand, ensuring a comprehensive review of all pertinent issues, including the limitation concern raised by the appellant.