2018 (1) TMI 822 - AT - Central Excise

CENVAT credit - Capital goods - pre-stressed concrete sleepers falling under Chapter 65 of the Central Excise Tariff - Held that - In the appellant s own case reported as Ultra Tech Cement Ltd. 2016 (9) TMI 284 - CESTAT HYDERABAD , it was observed that mono block concrete sleepers for Rail track are eligible Cenvatable goods - in the present case, admittedly the Railway siding was laid down from the factory premises up to the Railway station, which is necessary for inward transportation of the inputs and outward transportation of their final product - the pre-stressed cement sleepers are Cenvatable items. Time limitation - Held that - Admittedly the credit was being availed by reflecting the same in Cenvat credit account, which is a part of the statutory documents. In such a scenario no mala-fide can be attributed to the assessee so as to invoke longer period of limitation - demand barred by limitation. Appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
1. Entitlement to Cenvat credit for pre-stressed concrete sleepers used in private Railway siding.
2. Denial of credit by Revenue and imposition of penalties.
3. Nexus of sleepers with manufacturing activities.
4. Applicability of precedent decisions.
5. Distinction based on location of Railway siding.
6. Bar of limitation on demand.

Entitlement to Cenvat Credit:
The appellant, engaged in Cement/Clinker manufacturing, availed Cenvat credit for pre-stressed concrete sleepers used in a private Railway siding for transportation of inputs and final products. Revenue denied credit through a show cause notice. Appellant argued nexus with manufacturing activities and cited Tribunal decisions supporting eligibility of similar items. Both lower authorities rejected appellant's claim and imposed penalties, leading to the present appeal.

Nexus with Manufacturing Activities:
The Tribunal analyzed various precedent decisions, including cases involving concrete sleepers for Rail track and Railway siding outside factory premises. The Commissioner (Appeals) distinguished those cases, stating the sleepers in question were used from factory gate to Railway station, lacking nexus with manufacturing. However, the Tribunal disagreed, citing instances where activities outside factory premises were deemed Cenvatable due to their connection with manufacturing processes.

Applicability of Precedent Decisions:
The Tribunal referenced cases like Ultra Tech Cement Ltd. and Jindal Steel & Power Ltd., where concrete sleepers were considered Cenvatable. It highlighted decisions supporting Cenvat credit for facilities outside factory premises if linked to manufacturing. The Tribunal found the Commissioner's distinction based on location unjustified, as the Railway siding was essential for transportation related to manufacturing activities.

Bar of Limitation on Demand:
While allowing the appeal on merits, the Tribunal addressed the bar of limitation on the demand. It noted that the longer period of limitation invoked by Revenue lacked evidence of mala-fide intent on the appellant's part. The Tribunal emphasized that mere assumptions by lower authorities were insufficient to justify extending the limitation period, ultimately holding the demand as barred by limitation.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal on both merits and limitation grounds. The judgment emphasized the importance of establishing a clear nexus between activities, even if conducted outside factory premises, to determine eligibility for Cenvat credit.