2019 (3) TMI 237 - AT - Central Excise

CENVAT Credit - capital goods/input - MS Angles, MS Channels, MS Beams and joists - extended period of limitation - Held that - A manufacturer is entitled to avail cenvat credit on the articles, which may either qualify to be called as capital goods as defined under section 2 (i) of CCR, 2004 or qualify as inputs defined under Section 2 (k) of CCR, 2004 - Apparently and admittedly, the articles MS Angles etc. etc. do not qualify under any of the clauses (i) to (vii) of Rule 2 (i) of CCR, 2004 and thus have rightly denied to be the capital goods by Commissioner (Appeals). The order under challenge is however silent about the entitlement of the appellant to avail cenvat credit, if these goods qualified the definition of being called as inputs. Commissioner (Appeals) has committed an error while holding that there is no documentary evidence on record to indicate that the disputed items were, used in the manufacture of said capital goods - The total emphasis of appellant being confused about the impugned goods to be capital goods or inputs also is of no significance, because in either of the case appellant is entitled to avail the cenvat credit - Availing the said credit qua inputs at two different stage does not disentitle the appellant to avail the same. Time limitation - Held that - The issue of availment of cenvat credit by the appellant on the impugned goods was in the notice of Department at least since 2014. The allegation of suppression, therefore, of fact cannot sustain against the appellant - The period involved in the present show cause notice is w.e.f. April 2013 to September, 2013 and the show cause notice is dated 22nd July, 2015. Apparently it is beyond the normal period of limitation - there was no ground with the Department to invoke the proviso to Section 73 of Central Excise Act, 1944 for the extended period of limitation - thus, SCN is barred by time. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Admissibility of cenvat credit on MS Angles, MS Channels, MS Beams, and joists; Denial of credit by Department; Appeal before Tribunal; Classification of goods as capital goods or inputs; Consideration of Chartered Engineers certificate; Previous show cause notices; Time limitation for show cause notice.

Analysis:

1. Admissibility of Cenvat Credit:
The appeal concerns the admissibility of cenvat credit on specific items used in manufacturing rolling machines. The Department denied the credit, leading to a show cause notice and subsequent orders rejecting the appellant's appeal. The appellant argued that the items were used in manufacturing final products, making them eligible for credit. The Commissioner (Appeals) had previously granted relief based on a Chartered Engineers certificate, which was not adequately considered in the impugned order.

2. Classification of Goods:
The Department contended that the appellant was confused about whether the items were capital goods or inputs. The Commissioner (Appeals) denied the goods as capital goods, noting discrepancies in the appellant's records. However, the appellant maintained that the items qualified as inputs, challenging the denial of credit based on contradictory stands taken by the appellant.

3. Consideration of Chartered Engineers Certificate:
The appellant emphasized the Chartered Engineers certificate to support their claim, highlighting its submission to the adjudicating authorities. The appellant also pointed out a previous favorable decision based on the same certificate, which was not adequately acknowledged in the impugned order. The Tribunal found that the Commissioner (Appeals) erred in disregarding the certificate and related submissions.

4. Time Limitation for Show Cause Notice:
The appellant argued that the show cause notice was barred by time, citing a previous order from 2014 addressing a similar issue. The Tribunal agreed, noting that the Department had been aware of the credit issue since 2014, rendering the 2015 notice beyond the normal period of limitation. Consequently, the show cause notice was held to be time-barred, leading to the appeal being allowed and the impugned order set aside.

In conclusion, the Tribunal found in favor of the appellant, allowing the appeal based on the considerations of admissibility of cenvat credit, classification of goods, the significance of the Chartered Engineers certificate, and the time limitation for the show cause notice. The detailed analysis of each issue led to the decision to set aside the order under challenge.