2018 (4) TMI 476 - HC - Central Excise

CENVAT credit - Bins - denial of credit on the ground that the said Bins was wrongly classified under the heading 8474.90 whereas the correct classification would fall under the heading 7308 - Held that - The question as to whether the subject item would fall under heading 7308 or 8474.90, is essentially a question of fact. Moreover, if according to the appellant, the item would fall under heading 8474.90, it was for the appellant to explain as to why it has not claimed cenvat credit for the same item supplied by M/s Hindustan Steel for whom it had earlier availed credit but later on reversed it when the Revenue brought it to the notice of the same. The confirmation of the demand for reversal of cenvat credit is only to the extent falling within normal time period - appeal dismissed - decided against appellant.

Summary

Issues:
Challenge to final order dismissing appeal on cenvat credit for misclassified items.

Analysis:
The appeal under Section 35-G of the Central Excise Act, 1944 challenged the final order of the Tribunal dismissing the appellant's appeal regarding cenvat credit on 'Bins' supplied by M/s Simplex Engineering and Foundry Works Pvt. Ltd. The Tribunal held that the 'Bins' were wrongly classified under heading 8474.90 instead of 7308. The appellant availed cenvat credit on these misclassified items, leading to a demand raised by the Revenue. A show cause notice was issued, resulting in demands on M/s Simplex and the appellant. The Commissioner confirmed the demand, leading to an appeal by the appellant before the Tribunal.

The Tribunal set aside the penalty but didn't decide on the merits of the challenge to the denial of credit due to lack of permission from the Committee on Disputes (COD). The High Court remitted the matter back to the Tribunal following the Supreme Court's judgment on the concept of COD. The appellant argued that the classification of 'Bins' under heading 7308 was illegal, while the Revenue supported the impugned order. The issue of classification under 8474.90 or 7308 was deemed a question of fact. Notably, another supplier, M/s Hindustan Steel, had classified the same item under heading 7308 during the same period.

M/s Simplex had only argued on the demand barred by limitation, essentially conceding to the demand within the limitation period. The Tribunal found no substantial question of law to be arising for adjudication in the appeal. The confirmation of the demand for reversal of cenvat credit was limited to the normal time period, with the penalty already set aside in the previous order. Consequently, the appeal was dismissed.