2015 (10) TMI 878 - AT - Central Excise

Denial of CENVAT Credit - Invocation of extended period of limitation - whether CENVAT credit on items like Angles, channels, joints, HR Sheets, Plates, CRSS sheets in coils, CTD and Round bars loose etc., will be admissible to the appellant or not - Held that - Extended period cannot be invoked in a situation when conflicting views were available on a subject, which was finally settled by Larger Bench of CESTAT in the case of Vandana Global Ltd. vs Commissioner of Central Excise, Raipur (supra) in the year 2010. The period involved in the present case is 2007-08 and 2008-09 whereas Show Cause Notice has been issued on 16.07.2011, which is clearly time barred as extended period of five years, cannot be invoked in this case. - Decided in favour of assessee.

Summary

Issues:
Admissibility of CENVAT credit on various items used in construction of a plant for recycling of chemicals, Time-barred nature of Show Cause Notice.

Analysis:

Admissibility of CENVAT Credit:
The appellant filed an appeal against the order confirming a demand of Rs. 3,33,087/- along with interest and penalty under Rule 15 of Cenvat Credit Rules, 2004. The issue revolved around the admissibility of CENVAT credit on items like Angles, channels, HR Sheets, Plates, CRSS sheets, CTD, and Round bars loose used in constructing a chemical recycling plant. The appellant argued that these items should be considered as accessories for the capital goods and covered under Rule 2(a)(A)(iii) of CENVAT Credit Rules, 2004. Reference was made to legal precedents like the Supreme Court decision in Commissioner of Central Excise, Jaipur vs Rajasthan Spinning & Weaving Mills Ltd. and the Madras High Court decision in India Cements Ltd. vs CESTAT, Chennai. The appellant contended that conflicting views on the admissibility of CENVAT credit were resolved by the Larger Bench of CESTAT in the case of Vandana Global Ltd. vs Commissioner of Central Excise, Raipur in 2010. It was argued that since the issue was under dispute with divergent views, the extended period for invoking the Show Cause Notice should not apply.

Time-barred Nature of Show Cause Notice:
The Revenue argued that the credit for items used in manufacturing iron and steel structures, as used in a factory, would not be admissible based on a decision by the Hon'ble Apex Court. Additionally, it was highlighted that the appellant did not inform the Department or declare the items in their ER-I Returns, making the extended period applicable. After hearing both sides and examining the case records, the Tribunal concluded that the Show Cause Notice issued on 16.07.2011 for the period 2007-08 and 2008-09 was time-barred. The Tribunal held that since conflicting views on the admissibility of CENVAT credit were resolved by the Larger Bench in 2010, the extended period of five years could not be invoked in this case. Therefore, the appeal was allowed solely on the ground that the Show Cause Notice was time-barred.

This detailed analysis of the judgment addresses the issues of admissibility of CENVAT credit and the time-barred nature of the Show Cause Notice, providing a comprehensive understanding of the legal reasoning and decisions made by the Tribunal.