2018 (11) TMI 292 - AT - Central Excise

CENVAT Credit - various iron & steel items, paint & cement used by the appellant for manufacture of Supporting Structural - denial on the ground that the issue stands covered against them by the Larger Bench decision of the Tribunal in the case of M/s Vandana Global Ltd. V/s CCE, Raipur 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) - time limitation. Held that - The Larger Bench Decision of M/s Vandana Global Ltd. on which the Authorities below have relied upon, has been declared by the Hon ble Gujrat High Court as not a good law in the case of M/s Mundra Ports 2015 (5) TMI 663 - GUJARAT HIGH COURT - CENVAT Credit allowed. Time Limitation - Held that - The issue was not free from doubt and the precedent decisions prior to Larger Bench s judgment was in favour of the assessee. Admittedly, in such a scenario, the appellant cannot be held guilty of any mala fide so as to invoke the longer period of limitation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of Cenvat Credit for iron & steel items, paint, and cement used in manufacturing Supporting Structural.
2. Merits of the case and applicability of the Larger Bench decision.
3. Limitation period for raising the demand.

Analysis:
1. The appellants were denied Cenvat Credit amounting to ?2,13,08,290 for various materials used in manufacturing Supporting Structural. The denial was based on the Tribunal's Larger Bench decision in the case of M/s Vandana Global Ltd. The demand was raised for the period April 2006 to March 2009 through a show cause notice dated 08/03/2011.

2. The appellant challenged the denial of credit on merits and limitation. The advocate referred to the Gujarat High Court's decision in the case of M/s Mundra Ports & Special Economic Zone Ltd. and the Madras High Court's decision in the case of C.C.E. v/s M/s India Cement Ltd. to support their case. They argued that previous Tribunal decisions and their own case supported the allowance of such credit.

3. Regarding limitation, the advocate argued that since the earlier Tribunal decision favored the appellant and the matter was referred to the Larger Bench later, invoking the longer period of limitation was unjustified. They cited various decisions to support their stance. The Tribunal found merit in the appellant's arguments on both merits and limitation.

4. The Tribunal upheld the appellant's entitlement to the Cenvat Credit for iron & steel items, paint, and cement used in manufacturing. The Larger Bench decision was deemed not applicable based on the Gujarat High Court's ruling in another case. The Tribunal agreed with the appellant's contentions on both merit and limitation, setting aside the impugned order and allowing the appeal with consequential relief.

5. The Tribunal noted that the issue was not clear cut, and previous decisions were in favor of the appellant before the Larger Bench judgment. Therefore, the demand was considered barred by limitation due to lack of mala fide on the appellant's part. The decision was made in favor of the appellant based on the above considerations.