2024 (1) TMI 716 - AT - Central Excise

CENVAT Credit - capital goods used in the power plant which is situated at distance of 14Kms. away from the factory - period January 2002 to July 2004 - time limitation - HELD THAT - It is found that in the present matter Ld. adjudicating authority in respect of disputed cenvat credit observed that the present case is in respect of cenvat credit taken at their Clinker unit on the capital goods which were installed at power plant, which is around 14 KMs away from the Clinker unit and said power plant is not covered under the central excise registration issued to Appellant. Further Ld. Commissioner found that consent letter was issued to M/s Sanghi Industries Ltd. for installation of Captive Power Plant for their Cement Plant at Village Akri, Distt. Kutchh and same was not for the Appellant i.e M/s Sanghi Industries Ltd. (Cement Division), Clinker Unit, Sanghipuram, P.O. Motiber, Taluka Abdasa, Distt. Kutchh. It is found that for the availment of Cenvat credit on disputed capital goods, appellant first prove that the said power plant where the capital goods was used are belong to them - in the interest of justice one opportunity can be extended to the appellant to prove that power plant where the capital goods were used are belong to them. The appeal is disposed off by way of remand to the adjudicating authority for passing a fresh order after considering the documents/ evidences produced by the appellant in this regards.

Summary

Issues involved:
The issues involved in the judgment relate to the admissibility of Cenvat credit on capital goods used in a power plant situated away from the factory, the applicability of the period of limitation, and the alleged suppression of facts by the appellant.

Admissibility of Cenvat credit on capital goods:
The appellant, engaged in manufacturing excisable goods, availed Cenvat credit on capital goods used in a power plant located 14Kms away from the factory. The revenue alleged that the credit availed during a specific period was not admissible. The Commissioner disallowed the credit, leading to an appeal before CESTAT. The appellant argued citing precedents and contended that the issue was well-settled. The Tribunal found that the appellant should be given an opportunity to prove ownership of the power plant before a fresh decision is made.

Applicability of the period of limitation:
The appellant argued that the show cause notice issued for the period in question did not invoke the proviso Section 11A(1) and did not allege fraud or suppression of facts. They contended that the extended period of limitation was not applicable. Citing various decisions, the appellant maintained that there was no suppression of facts. The Tribunal directed the adjudicating authority to consider this aspect while deciding the matter afresh.

Alleged suppression of facts:
The appellant argued that the department was aware of all relevant facts regarding the availing of credit on inputs at the power plant, and hence, there was no suppression of facts. They relied on previous decisions to support their stance. The Tribunal emphasized the need for the adjudicating authority to allow the appellant to present their case and ensure principles of natural justice are followed in reaching a final decision.

This comprehensive summary provides an overview of the issues involved in the legal judgment, the arguments presented by both parties, and the Tribunal's decision to remand the matter for fresh consideration.