2014 (1) TMI 627 - AT - Central Excise

Denial of cenvat credit - SS sheets Plates Channels Bars Beams - Benefit of exemption under 67/95 - Waiver of Pre-deposit Held that - Names of fabricated items and the quantity of HR/SS plates used in fabricating these items have been given - there are several items fabricated by the appellants which appear to be components/accessories and therefore the definition of inputs appear to apply for the same - The appellant and their failure to mention the items manufactured within the factory in the ER-1 return would render them ineligible for the CENVAT credit and would make them liable for demand of CENVAT credit availed by them by invoking extended period Following Vandana Global Ltd. Versus CCE 2010 (4) TMI 133 - CESTAT NEW DELHI (LB) - the amount already deposited by the appellant is sufficient for the purpose of hearing the appeal - the requirement of pre-deposit on balance waived till the disposal Stay granted.

Summary

Issues:
1. Eligibility of CENVAT credit on duty paid on SS sheets, Plates, Channels, Bars, Beams for erecting Sulphuric Acid plant.
2. Declaration of use of steel sheets for manufacture of components to claim exemption under Notification No. 67/95.
3. Admissibility of credit when the machine is immovable property.
4. Failure to mention production and utilization of excisable goods in monthly ER-1 returns affecting credit eligibility.

Issue 1:
The appellant, engaged in manufacturing fertilizers and Sulphuric Acid, was denied CENVAT credit on duty paid for SS sheets, Plates, Channels, Bars, Beams used in erecting a Sulphuric Acid plant. The appellant claimed eligibility based on activities undertaken and materials used. The Superintendent supported eligibility, referencing a Tribunal decision. The appellant reversed credit for ineligible items but argued for unconditional waiver and stay, highlighting manufacturing components using credited materials.

Issue 2:
The AR contended that the appellant did not declare the use of steel sheets for parts manufacture to claim exemption under Notification No. 67/95. Citing a Supreme Court decision, it was argued that credit is inadmissible when the machine is immovable property. Additionally, failure to mention production in ER-1 returns was emphasized to challenge credit eligibility.

Issue 3:
Upon considering submissions, the Tribunal noted detailed descriptions of fabricated items using HR/SS plates, potentially qualifying as components/accessories. The Commissioner's observation of fabricating items for the plant was crucial. The key issue was whether failure to claim exemption and mention manufactured items in ER-1 returns affected credit eligibility and invoked extended period for demand. The Tribunal acknowledged the appellant's strong case on limitation due to conflicting decisions pre-Vandana Global, granting a waiver and stay on balance dues during appeal.

Conclusion:
The Tribunal recognized the complexities surrounding CENVAT credit eligibility for materials used in plant construction, emphasizing the importance of declarations and reporting in determining credit admissibility. The appellant's arguments, supported by internal reports and legal precedents, were pivotal in securing a waiver and stay on dues pending appeal, showcasing the significance of legal interpretations and factual assessments in tax matters.