2023 (8) TMI 1132 - AT - Central Excise

CENVAT Credit - capital goods - CR, SS Sheet, HR, SS Coil, old and used Aluminum structure parts, Aluminum coil etc. falling under chapter 72 76 - time limitation - HELD THAT - Though the appellant is prima facie entitled for the cenvat credit in the light of various judgments cited by the learned counsel on merit, however, the matter can be disposed of on limitation. The appellant have availed cenvat credit recorded in their records and declared regularly in their ER-1 returns. Moreover, on the legal issue of availability of cenvat credit on the said goods there were various judgments of division bench of this Tribunal, Larger Bench of this Tribunal and also various High Courts, therefore, the issue was purely interpretation of cenvat credit rules. For this reason also no mala fide intention can be attributed to the appellant. In the present case for the period of demand i.e. 19.10.2006 to 14.08.2007 the show cause notice was issued much beyond the normal period of one year i.e. on 25.06.2010. The appellant also cited various judgments on the identical facts and the issue involved in the present case that the demand is time bar. On the issue of invocation of longer period of demand the Hon ble Supreme Court in the case of M/S CONTINENTAL FOUNDATION JOINT VENTURE SHOLDING, NATHPA HP VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I 2007 (8) TMI 11 - SUPREME COURT has held that there cannot be suppression or mis-statement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of fact must be wilful. The demand is clearly time bar. Hence, not sustainable on limitation itself - Appeal allowed.

Summary

Issues involved:
The issue involved in the present case is whether the appellant is entitled to cenvat credit on goods such as CR, SS Sheet, HR, SS Coil, old and used Aluminum structure parts, Aluminum coil, falling under chapter 72 & 76, considered as capital goods used for machinery and kiln. The appellant claimed credit on these goods as parts and accessories of the machinery, while the department argued that these goods do not qualify as such.

Judgment Details:

Issue 1 - Eligibility for Cenvat Credit:
The appellant contended that the goods in question were used in the machinery and kiln, thus qualifying as parts and accessories of the machinery. The appellant cited various judgments to support their claim, distinguishing the present case from the larger bench judgment in Vandana Global Ltd. The appellant also argued that conflicting views by different benches and courts indicated no mala fide intention on their part. The Tribunal found that while the appellant may be entitled to cenvat credit based on merit, the matter could be disposed of on limitation grounds.

Issue 2 - Time Bar on Demand:
The appellant argued that the demand for cenvat credit was time-barred as they had regularly declared the credit in their returns and were under a bona fide belief of its availability. Citing various judgments, including Medicaps Limited and Parekh Plast Pvt. Ltd., the appellant contended that the demand was beyond the normal limitation period. The Tribunal agreed, noting that the demand for the period from 19.10.2006 to 14.08.2007 was raised on 25.06.2010, exceeding the standard one-year limit. Based on the legal principle outlined in Continental Foundation Jt. Venture case, the Tribunal held the demand to be time-barred and not sustainable on limitation grounds.

Conclusion:
Considering the arguments presented and the legal precedents cited, the Tribunal set aside the impugned order and allowed the appeal, pronouncing the judgment on 23.08.2023.