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2018 (2) TMI 280 - AT - Central ExciseCENVAT credit - capital goods - steel products, such as angles, channels, plates, bars, coils and roof sheeting, used for construction of factory sheds, structures for tanks and storage tanks - Held that - The amendment to the definition of capital goods in CCR 2004, which was the basis for determination of liability by the original authority, came into effect after the period covered in this dispute. Undoubtedly, the decision of the Larger Bench of the Tribunal in Vandana Global Ltd v. Commissioner of Central Excise, Raipur 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) would not exclude the present dispute from the scope of application of the amended definition - credit cannot be denied - appeal dismissed - decided against Revenue.
Issues:
- Dispute over denial of CENVAT credit on steel products for construction - Interpretation of definition of capital goods in CENVAT Credit Rules, 2004 - Applicability of various judicial decisions on CENVAT credit eligibility - Impact of amendment to the definition of capital goods on the case - Precedence of decisions by different benches and higher courts Detailed Analysis: 1. The appeal before the Appellate Tribunal concerned the denial of CENVAT credit amounting to &8377; 11,68,121 availed by a company for steel products used in construction activities. The original authority disallowed the credit for construction of factory sheds, tanks, and storage tanks, with the appeal focusing on the recovery of &8377; 4,91,074 related to tank construction, as the company had already reversed the credit for other items. The penalty imposed was also challenged in the appeal. 2. The first appellate authority set aside the original authority's order by considering the definition of capital goods in the CENVAT Credit Rules, 2004, which included storage tanks. It relied on judicial precedents such as the Supreme Court's decision in Rajasthan Spinning & Weaving Mills Ltd, the Madras High Court's decision in India Cements Ltd, and the Tribunal's decision in Hindustan Petroleum Corporation Ltd to support its decision. 3. The Authorized Representative contested the order by citing a Tribunal decision in Vandana Global Ltd case, arguing against the eligibility of certain construction materials for CENVAT credit. This argument was based on the Explanatory Memorandum and the legislative intent behind the CENVAT Credit Rules. 4. The appellant's Counsel referred to favorable decisions, including one by the Tribunal in Dalmia Cements (Bharat) Ltd case and a decision by the Karnataka High Court in Hindalco Industries Ltd case, supporting the availment of credit on structural items used for construction activities. 5. The impact of an amendment to the definition of capital goods in the CENVAT Credit Rules was discussed, noting that the amendment occurred after the period in question. The Tribunal emphasized the precedence of decisions, giving more weight to the decision of the Larger Bench over conflicting viewpoints from other benches and courts. 6. The Tribunal upheld the findings of the first appellate authority, stating that decisions favoring the assessee should prevail. It highlighted the importance of following binding precedents and decisions of higher courts, emphasizing the hierarchical judicial system's role in maintaining consistency and adherence to legal principles. In conclusion, the Appellate Tribunal dismissed the Revenue's appeal, affirming the decision in favor of the assessee based on the interpretation of relevant legal provisions, judicial precedents, and the hierarchy of court decisions.
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