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2025 (4) TMI 757 - AT - Central ExciseAvailment of CENVAT credit - capital goods or not - steel items used for the construction of technological and supporting structures in a sugar manufacturing plant - invocation of extended period of limitation - HELD THAT - The issue was considered by this Bench in the matter of M/s. Sunvik Steels Ltd Vs. CCE 2013 (11) TMI 1081 - CESTAT BANGALORE wherein it is held that for the period prior to 07.07.2009 the appellants are eligible to avail CENVAT credit on the inputs viz. HR coils HR Sheets M.S. Angles M.S. Channels and MS plates etc. and accordingly demand confirmed is not sustainable; for the period 07.07.2009 to April 2011 in principle CENVAT credit on the inputs viz. HR coils HR Sheets M.S. Angles M.S. Channels and MS plates etc. are not admissible. Consequently the impugned order is modified and the appeal is remanded to the original adjudicating authority to recalculate the demand for the period after 07.07.2009 if any payable. Similar view was upheld by the Tribunal in the matter of M/s BMM Ispat Limited Vs. Commr. C.Ex. Belgaum 2024 (4) TMI 671 - CESTAT BANGALORE and in the matter of M/s Sri Renuka Sugars 2024 (6) TMI 294 - CESTAT BANGALORE - Since the issue is squarely covered by the above decisions it is found that the material used by the Appellant for support of structures and platform for machineries and equipment used in the factory are eligible for CENVAT credit. Invocation of Extended period of limitation - HELD THAT - The Show cause notice (SCN) was issued on 03.01.2013 and in the absence of any allegation regarding suppression of facts for evasion of duty invocation of extended period of limitation is unsustainable. Conclusion - i) The steel items used for constructing and supporting manufacturing equipment qualify as capital goods for CENVAT credit. ii) The invocation of extended period of limitation is unsustainable. Appeal allowed.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Admissibility of CENVAT Credit on Steel Items Relevant legal framework and precedents: The case involves the interpretation of CENVAT credit rules, particularly regarding the classification of steel items as capital goods. The appellant cited several precedents where similar materials were deemed eligible for CENVAT credit, including decisions from the Supreme Court and various High Courts. Court's interpretation and reasoning: The Tribunal reviewed past decisions, notably the case of M/s. Sunvik Steels Ltd Vs. CCE, which established that prior to 07.07.2009, steel items like HR coils, HR Sheets, M.S. Angles, M.S. Channels, and MS plates were eligible for CENVAT credit. Key evidence and findings: The Tribunal noted that the appellant used steel materials for constructing and supporting structures necessary for sugar manufacturing equipment, aligning with previous cases where such use was considered part of capital goods. Application of law to facts: The Tribunal applied the legal principles from cited precedents to the appellant's situation, determining that the use of steel items for supporting structures and platforms in the factory qualifies for CENVAT credit. Treatment of competing arguments: The Tribunal acknowledged the respondent's reiteration of the adjudication authority's findings but found the appellant's reliance on established case law persuasive. Conclusions: The Tribunal concluded that the appellant is entitled to avail CENVAT credit on the steel items used in the construction of the sugar manufacturing plant. 2. Invocation of Extended Period of Limitation Relevant legal framework and precedents: The issue revolves around the applicability of the extended period of limitation for issuing a show cause notice under CENVAT credit rules. The appellant argued that the extended period is unjustified due to the absence of suppression of facts. Court's interpretation and reasoning: The Tribunal referenced the decision in M/s. Sunvik Steels Ltd, which highlighted that confusion regarding the admissibility of credit and the absence of suppression of facts preclude the invocation of the extended period. Key evidence and findings: The Tribunal found no evidence of suppression of facts or intent to evade duty by the appellant. The issuance of the show cause notice on 03.01.2013 for credit availed between February 2008 and December 2009 was deemed untimely. Application of law to facts: The Tribunal applied the principle that in the absence of suppression or misrepresentation, the extended period of limitation is not applicable. Treatment of competing arguments: The Tribunal considered the respondent's position but found the appellant's argument, supported by case law, more compelling. Conclusions: The Tribunal determined that the invocation of the extended period of limitation is unsustainable, and the demand for recovery of CENVAT credit cannot be confirmed for the period in question. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: The Tribunal cited the decision in M/s. Sunvik Steels Ltd, stating: "In view of the above discussions, for the period prior to 07.07.2009, the appellants are eligible to avail CENVAT credit on the inputs... and accordingly, demand confirmed is not sustainable." Core principles established: The Tribunal reaffirmed the principle that steel items used for constructing and supporting manufacturing equipment qualify as capital goods for CENVAT credit. Additionally, the absence of suppression or misrepresentation negates the applicability of the extended period of limitation. Final determinations on each issue: The Tribunal set aside the impugned order, allowing the appeal with consequential relief. The appellant is entitled to CENVAT credit on the steel items, and the invocation of the extended period of limitation is invalid.
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