2017 (6) TMI 467 - AT - Central Excise

CENVAT credit - manufacture of Sheet Glass and Float Glass - declarations not filed as prescribed under Rule 57 Q or 57 T of the said Rules, 1944 - whether appellant are entitled to CENVAT Credit on certain capital goods acquired by them during the period April 1996 to June 1996 or thereafter? - Held that - the capital goods in question have been received in the factory and put to use for production of taxable output, the CENVAT Credit cannot be denied for the reason that declarations have not been filed as prescribed under Rule 57 Q or 57 T of the said Rules, 1944. The objections that some of the documents are mutilated or marked as extra copy instead of duplicate copy for transfer as transporter are not tenable - there is no contumacious conduct or suppression of fact on the part of appellant. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Entitlement to Cenvat Credit on capital goods acquired during a specific period.

Analysis:
The appellant, a manufacturer of Sheet Glass and Float Glass, appealed to determine their entitlement to Cenvat Credit on certain capital goods acquired between April 1996 to June 1996 or later. The appellant had started installation of plant and machinery for Float Glass manufacturing alongside Sheet Glass from January 1994. The Revenue issued a show cause notice (SCN) in September 1996, alleging inadmissible credit on items for April to June 1996. The Order-in-Original disallowed a specific amount but allowed a reduced credit with a penalty. The appellant's appeal to the Ld. Commissioner (Appeals) was dismissed, leading to the appeal before the Tribunal.

The first issue concerned the credit of ?16,43,610 on Tin Ingots used in Float Glass production. The appellant cited a precedent order by the Tribunal, allowing similar credit. They argued that the denial was beyond the SCN and that the credit was utilized in the production of excisable products. The Tribunal agreed, allowing the credit. The second issue involved credit of ?1,68,304 on various items like Grinding Wheel, Belt Switch, etc. The denial was based on the absence of original invoices and the fact that Float Glass production had not commenced. The Tribunal found the denial unjustified, emphasizing that the goods were received and used in production, allowing the credit.

The third issue pertained to disallowed credit on items due to non-filing of declarations under Rule 57U. The appellant argued against denial for procedural lapses, citing a Tribunal ruling and a Circular clarifying procedural requirements. The Tribunal agreed, allowing the credit of ?4,46,448. The appellant did not press for the remaining amount. Overall, the Tribunal allowed Cenvat credit totaling ?22,58,364, emphasizing the necessity of capital goods being received and utilized for production, irrespective of procedural lapses. The appellant was granted consequential benefits as per the law.