2018 (10) TMI 536 - HC - Central Excise

Monetary amount involved in the appeal - CENVAT Credit - Held that - The monetary limit, involved in the instant case, being well below the amount fixed in the instruction dated 11.7.2018, the Department cannot pursue this appeal - Appeal dismissed.

Summary

Issues:
1. Interpretation of capital goods under Cenvat Credit Rules, 2004
2. Requirement of receiving and installing capital goods for availing credit
3. Legal validity of Tribunal's order in the absence of statutory provision

Interpretation of capital goods under Cenvat Credit Rules, 2004:
The High Court considered whether the Tribunal correctly interpreted the scope of capital goods under Rule 4(2)(a) and Rule 4(5)(a) of the Cenvat Credit Rules, 2004. The Court noted that the tax involved was less than the threshold limit set by the Central Board of Indirect Taxes and Customs. Due to the monetary limit being below the specified amount, the Department was directed not to pursue the appeal. As a result, the Court held that the appeal could not be pursued based on the monetary threshold, and the substantial questions of law were not examined.

Requirement of receiving and installing capital goods for availing credit:
The Court addressed whether the Tribunal was correct in allowing the appeal when the statutory provisions clearly stated that capital goods must be received and installed in the factory for availing credit. The Original Authority had sought to recover CENVAT credit availed by the assessee along with interest and penalty. However, since the monetary limit involved in the case was below the threshold specified in the instruction dated 11.7.2018, the Department was precluded from pursuing the appeal. Consequently, the Civil Miscellaneous Appeal was dismissed solely on this basis, leaving the substantial questions of law open for future consideration.

Legal validity of Tribunal's order in the absence of statutory provision:
The High Court examined whether the Tribunal's order was legal and correct in the absence of a specific statutory provision. The appeal filed by the Revenue was in response to an order passed by the Tribunal. The Court noted that the Department was instructed not to pursue appeals where the tax involved was below a certain monetary limit. As the tax amount in this case fell below the specified threshold, the Court held that the Department could not pursue the appeal. Therefore, the appeal was dismissed, and the substantial questions of law were not addressed, with no costs imposed.