2012 (11) TMI 200 - AT - Central Excise

Cenvat credit - MS Plates, Beams, Angles, Channels are used of fabrication of supporting structures in the sugar mill - Held that - Cenvat credit in respect of these items used for fabrication of supporting structures is not admissible as Cenvat credit to the assessee Penalty under Section 11AC - prior to the issue of the Vandana Global decision, there were decisions in favour of the respondents under which the Cenvat credit on the inputs was admissible to the respondent and some of these decisions were relied upon by the C.C.E. (Appeals) in the impugned order - since the matter pertained to interpretation of the Cenvat Credit Rules, there is no reason for imposition of penalty even in respect of MS Plates, Beams, Angles, Channels used for fabrication of supporting - Revenue appeal in respect of imposition of penalty is rejected

Summary

Issues:
- Admissibility of Cenvat credit on MS Plates, Beams, Angles, Channels used for fabrication of supporting structures.
- Admissibility of Cenvat credit on Film type sulphur burner.
- Imposition of penalty under Section 11AC.

Admissibility of Cenvat credit on MS Plates, Beams, Angles, Channels:
The appeal was filed by Revenue against an order-in-appeal regarding the admissibility of Cenvat credit on MS Plates, Beams, Angles, Channels used for fabrication of supporting structures in the manufacturing process. The Department observed discrepancies in the Cenvat credit claimed by the respondents on these items. The Revenue argued that as per the Larger Bench decision in Vandana Global case, Cenvat credit for these items is not admissible. The respondent, however, contended that these items were essential for supporting structures and cited previous decisions in their favor. The tribunal held that based on the Vandana Global decision, Cenvat credit on these items was not admissible, overturning the order-in-appeal.

Admissibility of Cenvat credit on Film type sulphur burner:
The issue of the admissibility of Cenvat credit on the Film type sulphur burner was also considered. The respondent argued that the sulphur burner was crucial for the manufacturing process as it was essential for the generation of sulphur dioxide used in juice clarification, a vital step in sugar production. The tribunal upheld the order-in-appeal's decision to allow Cenvat credit on the sulphur burner, emphasizing its importance in the manufacturing process.

Imposition of penalty under Section 11AC:
Regarding the imposition of penalty under Section 11AC, the tribunal noted that prior to the Vandana Global decision, there were conflicting decisions on the admissibility of Cenvat credit on inputs. The respondent had relied on these previous decisions, and the tribunal acknowledged that the matter involved the interpretation of Cenvat Credit Rules. Consequently, the tribunal rejected the Revenue's appeal for imposing a penalty, considering the evolving interpretations and decisions on the issue. The appeal was disposed of based on the findings related to penalties and admissibility of Cenvat credit on specific items.