2018 (1) TMI 369 - AT - Central Excise

CENVAT credit - inputs - capital goods - Held that - the appellant had produced the Chartered Engineer Certificate to substantiate the use of the inputs and capital goods - the Commissioner (Appeals) had disallowed the credit of ₹ 16,46,940.00 in respect of items used on engineering goods, civil construction etc. It is a case of eligibility of the Cenvat Credit under the provision of the Cenvat Credit Rules and therefore the Commissioner (Appeals) rightly set aside the penalties. Appeal dismissed - decided against Revenue.

Summary

Issues:
Interpretation of Cenvat Credit Rules, 2004 for availing credit on inputs and capital goods.

Analysis:
The case involved a manufacturer availing Cenvat Credit benefit on inputs and capital goods under the Cenvat Credit Rules, 2004. A Show Cause Notice was issued proposing to deny Cenvat Credit on certain inputs availed by the manufacturer. The Adjudicating authority confirmed the demand of Cenvat Credit and imposed penalties. The Commissioner (Appeals) modified the Adjudication Order by disallowing credit of a specific amount and setting aside the penalties. The Revenue filed an appeal against the Commissioner (Appeals) Order.

The Commissioner (Appeals) examined the matter itemwise and provided detailed findings on allowing and disallowing the credit. The Commissioner allowed credit on items like duty paid on grease, paint, ERW steel pipes, forged rolls, HR plates/sheets, angles, plates, welding electrodes, and other items, stating they fell within the definition of inputs or capital goods under the Cenvat Credit Rules, 2004. The Commissioner considered various legal precedents and definitions to support the allowance of credit on these items.

The Revenue raised objections regarding the rejected ERW pipes, pre-engineered buildings, and other items, arguing that they did not qualify as inputs or capital goods. However, the manufacturer provided Chartered Engineer Certificates and submissions justifying the use of these items as inputs or capital goods. The Commissioner (Appeals) considered these submissions and allowed the credit on these items, emphasizing their compliance with the rules.

In the final judgment, the Tribunal upheld the Commissioner (Appeals) Order, rejecting the Revenue's appeal. The Tribunal found no reason to interfere with the Commissioner's decision, as it was based on a thorough examination of the facts and legal provisions. The Tribunal emphasized the importance of eligibility for Cenvat Credit under the Cenvat Credit Rules, ultimately affirming the decision to set aside the penalties imposed on the manufacturer.

In conclusion, the judgment highlighted the significance of adhering to the definitions and provisions of the Cenvat Credit Rules, 2004 for availing credit on inputs and capital goods. The detailed analysis by the Commissioner (Appeals) and the subsequent affirmation by the Tribunal underscored the importance of proper documentation and justification to support the eligibility of Cenvat Credit in such cases.