2018 (10) TMI 1462 - AT - Central Excise

CENVAT Credit - inputs/capital goods - MS angles, joists, channels, MS plates/sheets falling used for fabrication of supporting structure for the equipment - the appellants have produced the certificates of the Chartered Engineer before the Commissioner (A) but the Commissioner (A) has refused to consider the same on the ground that the same has not been produced before the original authority - principles of natural justice. Held that - It is essential to verify the usage of the impugned goods and for that purpose, I remand all these appeals to the original authority to verify the usage of the impugned goods on the basis of Chartered Engineer certificate and other documents which the appellants may rely upon in order to prove the usage - appeal allowed by way of remand.

Summary

Issues:
Appeals against rejection of CENVAT credit on specific goods under CCR, 2004.

Analysis:
The appeals were filed against the rejection of CENVAT credit on goods like MS angles, joists, channels, and plates/sheets under Chapter 72 of CETA, 1985, used for fabrication of supporting structures. Revenue contended that these structures did not qualify as capital goods under Rule 2(a) of CCR, 2004. Show-cause notices were issued proposing to demand ineligible CENVAT credit with interest and penalty. Adjudicating authority disallowed the credit, ordered recovery, and imposed penalties. Appellants argued that the goods were used for fabrication of capital goods or their components, supported by Chartered Engineer certificates. However, the Commissioner (A) rejected the appeals citing lack of evidence produced before the original authority.

The appellant's counsel argued that the impugned order was legally unsustainable, contradictory, and against judicial precedents. They asserted that the goods qualified as capital goods or inputs under CCR, 2004, used for fabrication of machinery parts. The Commissioner (A) was criticized for not considering the Chartered Engineer certificate and other evidence presented. The counsel requested a remand to the original authority for verification based on the certificates, photographs, and drawings submitted. The learned AR did not object to verifying the usage of the goods in question.

Consequently, the presiding member ordered a remand of all appeals to the original authority for verifying the usage of the goods based on the Chartered Engineer certificate and other supporting documents. The original authority was directed to issue a reasoned order, ensuring principles of natural justice, an opportunity for a hearing, and document submission by the appellants. The appeals were allowed by way of remand, emphasizing the need for thorough verification.

In conclusion, the judgment focused on the essential verification of the usage of goods in question for CENVAT credit eligibility. The decision highlighted the importance of considering all evidence, including Chartered Engineer certificates, photographs, and drawings, in determining the admissibility of the credit. The remand to the original authority aimed to ensure a fair assessment based on complete documentation and compliance with procedural fairness.