2018 (5) TMI 1661 - AT - Central Excise

CENVAT credit - inputs/capital goods - structural items like steel angles, coils, channels, MS plates falling under Chapter 72 and 73 of Central Excise Tariff Act - Appellant has given the details of invoices and the items and the usage of that items in a table in the grounds of appeal and submitted that if the matter is remanded back to the authority, then the appellant will be able to establish with each item and its usage Held that - This case needs to be remanded back to the original authority for verification of the various items and its usage in the factory and thereafter, the original authority will pass fresh order after considering the documents which may be produced by the appellant in support of their claim - appeal allowed by way of remand.

Summary

Issues:
1. Eligibility of CENVAT credit on structural items like steel angles, coils, channels, and MS plates as capital goods.
2. Rejection of appeal by the Commissioner (A) based on inadmissible credit availed by the appellant.
3. Need for remand to the original authority for verification of items and their usage in the factory.

Detailed Analysis:
Issue 1: The appeal questioned the eligibility of CENVAT credit on structural items like steel angles, coils, channels, and MS plates as capital goods. The appellant contended that they had availed credit on eligible capital goods specified under the CENVAT Credit Rules, 2004, and on items used for fabricating crane girder and other capital goods. The appellant cited a decision of the Karnataka High Court in support of their claim and argued that they did not suppress any facts to evade tax. The learned counsel emphasized the usage of the items in the manufacture of the final product.

Issue 2: The Commissioner (A) rejected the appeal of the appellant, leading to the present appeal. The impugned order was challenged on the grounds of not properly appreciating the facts and the law. The appellant argued that the order was unsustainable in law. The original authority had confirmed the demand for recovery of inadmissible credit on the mentioned structural items, along with interest and penalty under Rule 15(2) of CENVAT Credit Rules, 2004. The appellant's plea was based on the usage of the items for specific manufacturing purposes.

Issue 3: After hearing both parties and examining the records, the tribunal found merit in the appellant's request for a remand to the original authority for verification of the various items and their usage in the factory. The appellant provided details of invoices and item usage in a table, indicating the items' role in fabricating crane girders and other capital goods. Both parties agreed to the remand for further verification. Consequently, the tribunal allowed the appeal by remanding the case back to the original authority for a fresh order based on the evidence presented by the appellant.

In conclusion, the tribunal decided to remand the case for detailed verification of the items and their usage, emphasizing the importance of establishing the connection between the availed credit and the manufacturing processes.