2018 (7) TMI 309 - AT - Central Excise

CENVAT Credit - capital goods - Angles, Joists, Channels, Mill Plate, Steel Hot Strip etc. - appellant contended that these items were used for repairing and maintenance of machinery, which was used within the factory of production for manufacture of final product - Held that - The Tribunal in the case of Commissioner of Central Excise Panchkula Vs. Shahbad Co-operative Sugar Mills Limited 2014 (3) TMI 309 - CESTAT NEW DELHI dismissed the appeal filed by the Revenue and held that items of articles of Iron & Steel used for repairing, maintenance of Plant & Machinery are eligible for Cenvat Credit. It is also noted that there was a dispute on the eligibility of the Cenvat Credit on these items which were referred to the Larger Bench of the Tribunal for decision. In such situation, the findings of the lower authorities that there was a suppression of facts with intent to evade payment of duty cannot be accepted. Appeal allowed - decided in favor of appellant.

Summary

Issues: Alleged wrongful availing of Cenvat Credit on Capital goods, demand confirmation, penalty imposition, appeal rejection, eligibility of items for Cenvat Credit, suppression of facts, limitation period.

The judgment deals with a case where the appellant, engaged in the manufacture of Paper and Paper Board, faced allegations of wrongly availing Cenvat Credit on Capital goods like Angles, Joists, Channels, Mill Plate, and Steel Hot Strip during April 2008 to March 2010. The Adjudicating authority confirmed a demand of ?23,28,523.00 along with interest and imposed an equal amount of penalty. The Commissioner (Appeals) rejected the appellant's appeal. The appellant contended that the items in question were used for repairing and maintenance of machinery within the factory for the manufacture of the final product. The appellant argued that the demand for Cenvat Credit beyond the limitation period was not sustainable as the department was aware of the facts, and statutory returns were regularly filed. The appellant also provided a compilation of case laws supporting their position.

The Tribunal referred to precedents where it was held that items of Iron and Steel used for repairing and maintenance of Plant & Machinery are eligible for Cenvat Credit. The Tribunal emphasized that the items in question were indeed used for repairs and maintenance, not for construction purposes as claimed by the Commissioner (Appeals). The Tribunal noted that the appellant had disclosed the usage of these items for repairs and maintenance, which aligned with previous decisions. The Tribunal found that the lower authorities' conclusion of suppression of facts to evade duty was unfounded, especially considering the ongoing dispute on the eligibility of Cenvat Credit for these items referred to the Larger Bench of the Tribunal for decision.

Citing various case laws in support of their decision, the Tribunal set aside the impugned Order and allowed the appeal filed by the appellant. The judgment highlights the importance of factual disclosure, the eligibility of items for Cenvat Credit, and the need for a thorough examination of the circumstances before concluding on alleged suppression of facts.