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2023 (11) TMI 366 - AT - Central ExciseCENVAT Credit - ineligibility of certain goods procured by them that were claimed to conform to inputs in rule 2(k) of CENVAT Credit Rules, 2004 - claim of the appellant is that these goods were used in the setting up of lube oil upgradation plant , diesel hydro treatment plant and similar projects which are of capital nature and, therefore, entitled to availment under CENVAT Credit Rules, 2004, of credit of duties paid on procurement. HELD THAT - It appears from the records that there has been a summary finding by the adjudicating authority on the deployment of the impugned materials. For determining eligibility for availment of credit, it is important to note in context that these projects are turn-key projects and that the utilization of such materials in the process of setting up such facilities on site would be intrinsic to the manufacture of capital goods. There was no evidence adduced to establish that these materials were used only for providing such structures for support of capital goods. It is also on record that the adjudicating authority was less than satisfied about the documents furnished in support of the claim of the appellants that these were used in the creation of capital goods on which appellant was not placed on the notice. In view of this deficiency in finding, it would be inappropriate to take a decision on the eligibility of each of the goods claimed to be so. It was for the adjudicating authority to examine the claim of the appellant in detail and, to the extent of inapplicability, give a clear finding on the actual usage owing to which it was not entitled - the impugned order is set aside - matter remanded back to the original authority for a fresh decision after affording an opportunity to the appellants herein to present their claim on factual as well as legal submissions. Appeal allowed by way of remand.
Issues involved:
The appeal challenges the finding of ineligibility of certain goods procured by M/s Hindustan Petroleum Corporation Ltd under CENVAT Credit Rules, 2004, for use in capital projects, specifically the 'lube oil upgradation plant' and 'diesel hydro treatment plant'. Details of the Judgment: 1. The appellant claimed that the goods in question were used in projects of capital nature and thus eligible for availing credit under CENVAT Credit Rules, 2004. 2. The appellant argued that the adjudicating authority erred in relying on certifications and documents to conclude ineligibility of the goods, citing changes in the law post an amendment effective from April 2011. 3. The Authorized Representative contended that the goods procured did not qualify as 'inputs' under the rules, referencing a Tribunal decision and Supreme Court precedent. 4. The definition of 'inputs' under CENVAT Credit Rules, 2004 underwent changes, excluding certain items like cement and structures for support of capital goods from availing credit. 5. The Tribunal found that the adjudicating authority's reliance on outdated legal interpretations was misplaced, and the restriction on inputs used in capital goods should only be effective from July 2009, not earlier. 6. The Tribunal noted deficiencies in the original authority's examination of the claim, emphasizing the need for a detailed assessment of the actual usage of the goods in the projects. The matter was remanded back for a fresh decision. (Order pronounced in the open court on 06/11/2023)
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