2018 (2) TMI 386 - AT - Central Excise

CENVAT credit - components which were procured by the assessee for purpose of setting up the captive power plant - Held that - other than a blind assertion, no documentary evidence has been submitted by the assessee either during the course of the present appeal or even before the adjudicating authority. The finding of fact on crucial issue is matter to resolve the present dispute. It is appropriate to set aside both the impugned orders and remand the matter to the jurisdictional Commissioner to carry out the verification whether the components involved in the present dispute were used for setting up of a power plant and whether such power plant has been constructed in the premise of the assessee - appeal allowed by way of remand.

Summary

Issues:
1. Disallowance of cenvat credit on capital goods procured for setting up a captive power plant.
2. Dispute regarding the use of components for setting up a power plant and subsequent sale to another company.
3. Lack of documentary evidence to support the claim of the appellant regarding the ownership and utilization of the power plant.

Analysis:
1. The appellant filed an appeal against the Order-in-Original disallowing cenvat credit on capital goods procured for a captive power plant. The Commissioner (Appeals) allowed the credit for a similar case in a different period. The Revenue filed an appeal against this decision. The Tribunal noted the past dispute on a similar issue and the subsequent conflicting decisions by the Tribunal and the High Court. The appellant contended that the new power plant was not transferred to another company, unlike the previous case. The Commissioner disallowed the credit, stating that the power plant was operated by a different company.

2. The Tribunal heard arguments from both sides. The appellant claimed that since they installed the power plant themselves and did not transfer it, they should be allowed the cenvat credit. The Revenue argued that there was no evidence to support the appellant's claim that the components were used for a new power plant. The Tribunal found the facts unclear and noted the lack of documentary evidence supporting the appellant's assertions. The ownership and utilization of the power plant were crucial issues to resolve the dispute.

3. In light of the above, the Tribunal set aside the impugned orders and remanded the matter to the Commissioner for verification. The Commissioner was tasked with determining whether the components were used for the power plant and if the plant was constructed on the appellant's premises. The ownership status of the power plant was also to be verified, with the appellant given an opportunity to present relevant evidence. The Tribunal emphasized the need for a thorough examination of these issues before reaching a decision, keeping all other related matters open for consideration.