2009 (1) TMI 250 - AT - Central Excise

Capital Goods Cenvat Credit held that - welding electrodes are eligible for Cenvat credit - asbestos jointing sheet as the same are also used for repair and maintenance of the sugar mill machinery - sealing the leaking pipes and tubes are eligible for Cenvat credit - When the Department acknowledges that the fact of taking Cenvat credit in respect of welding electrodes and asbestos jointing sheets had been declared by the Appellants in the Cenvat credit declaration, it cannot allege that the Appellants have suppressed this information from it

Summary

Issues:
- Eligibility of Cenvat credit for welding electrodes used for repair and maintenance of machinery
- Eligibility of Cenvat credit for asbestos jointing sheets used for sealing leaking tubes and pipes
- Invocation of extended period for recovery of Cenvat credit
- Dismissal of SLP by the Supreme Court and its implications on the law laid down

Issue 1: Eligibility of Cenvat credit for welding electrodes:
The appeal questioned the eligibility of Cenvat credit for welding electrodes used for machinery repair. The Appellant argued for credit eligibility based on a Rajasthan High Court judgment and challenged the contrary view in the SAIL case. The Tribunal, considering the dismissal of SLP by the Supreme Court, held that it does not establish legal precedent. Citing relevant judgments, the Tribunal ruled in favor of the Appellant, allowing Cenvat credit for welding electrodes.

Issue 2: Eligibility of Cenvat credit for asbestos jointing sheets:
The dispute also involved the eligibility of Cenvat credit for asbestos jointing sheets essential for machinery function. The Appellant contended that these sheets are accessories and thus qualify for credit. The Tribunal, referring to the Rajasthan High Court judgment and a previous Tribunal decision, agreed with the Appellant's argument. Consequently, the Tribunal allowed Cenvat credit for asbestos jointing sheets.

Issue 3: Invocation of extended period for recovery of Cenvat credit:
The Department invoked the extended period for recovering Cenvat credit, alleging suppression of facts by the Appellant. However, the Tribunal noted that the Appellant had declared the credit in their submissions, and the Department could have sought clarification. Citing Supreme Court precedents, the Tribunal concluded that the circumstances for invoking the extended period did not exist, thus deeming the demand time-barred.

Issue 4: Dismissal of SLP by the Supreme Court and its implications:
The Tribunal analyzed the dismissal of the SLP by the Supreme Court in the context of establishing legal precedent. It referenced various judgments to clarify that a summary dismissal does not set a legal precedent. This analysis was crucial in determining the weight of the Supreme Court's decision on the matter at hand.

In conclusion, the Tribunal set aside the impugned order, ruling in favor of the Appellant on both the merit of Cenvat credit eligibility and the limitation aspect. The appeal was allowed based on the detailed analysis of legal precedents and the specific circumstances of the case.