2015 (8) TMI 246 - HC - Central Excise

Denial of CENVAT Credit - Capital goods - M.S.Plates, M.S.Angles, M.S.Channels and H.R. Plates, which were purchased and utilized in the construction/erection of plant. - Held that - Revenue relied upon decision of Saraswati Sugar Mills V. Comissioner of Central Excise, Delhi - III. There is no change in the circumstance and this Court had already considered the issue and held that the decision reported in (Saraswati Sugar Mills V. Commissioner of Central Excise, Delhi - III) in 2011 (8) TMI 4 - SUPREME COURT OF INDIA is distinguishable on facts. This Court applied the principles laid down in the decision reported in 2010 (7) TMI 12 - SUPREME COURT OF INDIA (Commissioner of Central Excise Jaipur V. Rajasthan Spinning & Weaving Mills Ltd.) and held in favour of the assessee. - Following the principles laid down in the decision (Commissioner of Central Excise Jaipur V. Rajasthan Spinning & Weaving Mills Ltd.) and the earlier decision of this Court in 2013 (1) TMI 5 - Madras High Court , we are inclined to allow the appeal, thereby set aside theorder of the Tribunal - Decided in favour of assessee.

Issues:
1. Challenge to orders made by the Customs, Excise and Service Tax Appellate Tribunal.
2. Availing Cenvat Credit on capital goods used in plant construction.
3. Dispute over the classification of goods as capital goods.
4. Interpretation of notifications and effective dates.
5. Applicability of previous court decisions on similar issues.

Analysis:
1. The case involved challenging orders made by the Customs, Excise and Service Tax Appellate Tribunal under Section 35-G of the Central Excise Act, 1944. The main issue was whether the Tribunal's decision giving effect to a specific notification prior to its effective date was justified. The High Court framed a substantial question of law regarding this matter.

2. The appellant, a manufacturer of various goods, availed Cenvat Credit on capital goods used in plant construction. Disputes arose when the Department issued show cause notices claiming that these goods were not capital goods, leading to a demand being made on them. The appellant objected to this, but the Adjudicating Authority confirmed the demand. The Commissioner (Appeals) later allowed the appeal based on a previous Tribunal decision, which was then challenged by the Department before the Appellate Tribunal.

3. The Tribunal, following a different decision, allowed the appeal filed by the Revenue, leading to the appellant filing the present appeals. The issue revolved around the classification of goods as capital goods and the eligibility for Cenvat Credit on them, which was a point of contention between the parties.

4. The High Court considered various previous court decisions, including one involving the appellant's own case, to determine the classification of goods as capital goods. The Court highlighted the importance of effective dates of notifications and the application of the user test in such cases. The Court differentiated the facts of the present case from previous decisions cited by the Revenue, ultimately leading to the dismissal of the Revenue's appeal and confirmation of the Tribunal's order.

5. The High Court extensively analyzed previous judgments and legal principles related to the classification of goods as capital goods and the eligibility for Cenvat Credit. By applying the principles laid down in specific decisions, the Court allowed the appeal, set aside the Tribunal's order, and closed the connected Miscellaneous petitions. The judgment reiterated the importance of consistent interpretation and application of legal principles in such matters.

← Previous Next →