2024 (5) TMI 1174 - AT - Central Excise

CENVAT Credit - capital goods/inputs - various steel items namely, M.S. Rods, M.S. Channels, Beams, M.S. Plates, Bars, Joints, Beams, Angles, Flats and Flanges falling under Chapter 72 of the Central Excise Tariff Act, 1985 - invocation of extended period of limitation - HELD THAT - The appellant has been able to show the usage of the said items in fabrication of their capital goods, without which no manufacturing activity can take place. The same is supported by the certificate issued by a Chartered Engineer - during the impugned period, the issue was in dispute as to whether an assessee is entitled to take CENVAT Credit on the above said steel items as inputs or capital goods - the extended period of limitation is not invokable in the facts and circumstances of the present case. As the appellant has been able to establish that the items in question have been used in the fabrication of their capital goods, in these circumstances, the appellant has correctly availed the CENVAT Credit. The impugned order is set aside - appeal allowed.

Summary

Issues involved: Appeal against denial of CENVAT Credit on steel items; Invocation of extended period of limitation; Interpretation of terms 'capital goods' and 'inputs'; Applicability of CENVAT Credit Rules.

Summary:
The appellant appealed against the denial of CENVAT Credit on various steel items under Chapter 72 of the Central Excise Tariff Act, 1985, contending that these items were used in the fabrication of their capital goods. The dispute pertained to the period 2006-09, with a Show Cause Notice issued in 2012 invoking the extended period of limitation. The appellant demonstrated the usage of the steel items in manufacturing activities supported by a certificate from a Chartered Engineer, establishing their eligibility for CENVAT Credit.

During the impugned period, the eligibility of taking CENVAT Credit on the steel items as inputs or capital goods was in dispute. The Tribunal held that the extended period of limitation was not applicable in this case. The issue was settled by the Hon'ble Chhattisgarh High Court in a similar case, emphasizing the interpretation of terms like 'capital goods' and 'inputs' under the CENVAT Credit Rules, 2004.

Referring to precedents from different High Courts, it was established that the relevant amendment to the CENVAT Credit Rules, 2004, was not clarificatory and could not be applied retrospectively. The Tribunal concurred with this view and ruled in favor of the appellant, allowing the appeal and setting aside the impugned order. The appeals filed by the Revenue were dismissed, with no order as to costs.

In conclusion, the appellant successfully demonstrated the use of the steel items in the fabrication of their capital goods, justifying the availing of CENVAT Credit. The impugned order was set aside, and the appeal was allowed with consequential relief, if any.