2018 (4) TMI 1388 - AT - Central Excise

CENVAT credit - inputs - various structural items like plates, rounds etc, used in the fabrication of cooling bed - time limitation - Held that - irrespective of the quantities mentioned in the Chartered Engineer certificate, the various structural items used in the manufacture of cooling bed have been held to be Cenvatable in the Tribunal s decision in the case of Ramsons TMT Pvt. Ltd. Vs. CCE, Nagpur 2016 (5) TMI 1119 - CESTAT MUMBAI - credit allowed. Time limitation - Held that - entire credit was availed by the appellant by reflecting the same in Cenvat Credit Account and in absence of any positive evidence to show that there was any suppression or misstatement on the part of the appellant with a malafide, the extended period is not available - demand hit by limitation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of Cenvat credit on structural items used in the fabrication of cooling bed
2. Disallowance of Cenvat credit based on Chartered Engineer certificate
3. Invocation of longer period for raising demand
4. Denial of credit for MS round used for removing slag from furnace

Analysis:

Issue 1: Denial of Cenvat credit on structural items
The appellant availed Cenvat credit on structural items used in the fabrication of a cooling bed, but a show cause notice was issued proposing to deny the credit due to inappropriate use of inputs. The authorities disallowed around &8377; 7,49,913/- of Cenvat credit. However, the Tribunal held that the structural items used in the manufacture of the cooling bed were Cenvatable based on previous decisions. Since there was no evidence of suppression or misstatement by the appellant, the demand was held to be barred by limitation.

Issue 2: Disallowance based on Chartered Engineer certificate
During adjudication, the appellant presented a Chartered Engineer certificate indicating the use of inputs in the manufacture of the cooling bed. The authorities disputed the quantity mentioned in the certificate and confirmed the demand. However, the Tribunal found that regardless of the discrepancies in the certificate, the inputs were held to be Cenvatable based on precedents. Therefore, the demand based on the certificate was not sustained.

Issue 3: Invocation of longer period for raising demand
The demand for Cenvat credit was raised by invoking the longer period. However, since the appellant had properly reflected the credit in their Cenvat Credit Account without any evidence of suppression or misstatement, the extended period was deemed unavailable to the Revenue. Consequently, the demand based on the longer period was held to be invalid.

Issue 4: Denial of credit for MS round used for removing slag
A part of the demand relating to MS round used for removing slag from the furnace was denied, alleging lack of evidence for the quantity used. The appellant contended that they maintained records in Tally software and the appellate authority had acknowledged the Cenvatability of the inputs. The Tribunal noted that the Revenue failed to demonstrate how the MS rounds were consumed or cleared clandestinely by the appellant. As per established law, the burden of proof lies with the party demanding duties, and in the absence of such evidence, the demand was unjustified.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeal with consequential relief, emphasizing the Cenvatability of the inputs and the lack of evidence supporting the demands raised by the Revenue.