2015 (10) TMI 1116 - AT - Central Excise

Admissibility of CENVAT Credit - M.S. channels, angles, beams, plates, H.R. Coils etc - Intention of evasion - Held that - So far as the admissibility of CENVAT Credit on the items involved in these proceedings is concerned, the appellant relied upon the judgment of Hon ble Supreme Court in the case of CCE Jaipur Vs M/s Rajasthan Spinning & Weaving Mills Ltd (supra). In this case before Apex Court, steel plates and M.S. channels were used in the fabrication of chimney as capital goods under Rule 57Q of the Central Excise Rules, 1944. It was held by the Apex Court that any item used for fabrication of the chimney has to be treated as an accessory of the machinery under Rule 57Q of Central Excise Rules, 1944. - it is observed from the Chartered Engineer s certificate dt.25.03.2010 relied upon by appellant that the items involved in these proceedings were used not only for installation of plant/machinery but also used for replacement of damaged/worn out parts of the machines. No separate quantities and corresponding CENVAT Credit are available as to which quantity has gone for use in the making of support structures/foundations of Plant & Machinery and what quantity has been used for replacement of damaged/worn out parts of the capital goods. In the absence of any such details, the matter is required to be remanded back - Appellant should also produce a specific Chartered Engineer s certificate to the adjudicating authority clearly bringing out the quantity used in the replacement of damaged/worn out parts of the capital goods and the corresponding CENVAT Credit involved. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Admissibility of CENVAT Credit on items like M.S. channels, angles, beams, plates, H.R. Coils as capital goods under Chapter 72 of Central Excise Tariff Act.
2. Justification of setting aside the penalty imposed on the appellant.

Analysis:
1. The appellant, M/s Atul Limited, filed an appeal against the denial of CENVAT Credit on certain items used in maintenance and repair of machinery. The appellant argued that the items were essential for the manufacture of capital goods and relied on a Chartered Engineer's certificate. Reference was made to a Supreme Court judgment to support the claim that such items should be treated as accessories. The issue of admissibility of CENVAT Credit on these items was in dispute due to conflicting views in different courts. The Larger Bench decision in the case of M/s Vandana Global Ltd settled the matter, concluding that the appellant had no intention to evade duty, leading to the rejection of the Revenue's appeal.

2. The Revenue filed an appeal against the setting aside of the penalty imposed on the appellant. The Revenue contended that the Chartered Engineer's certificate did not provide a breakdown of inputs used for maintenance versus support structures. The lower authorities' order was defended, and the restoration of the penalty was sought. After hearing both sides and reviewing the case records, it was determined that since the issue of admissibility of credit on the disputed items was unsettled, the appellant did not have any intention to evade duty, warranting the rejection of the Revenue's appeal. The appellant's reliance on a Supreme Court judgment further supported the admissibility of CENVAT Credit on the items used for maintenance and repairs. However, due to the lack of specific details in the Chartered Engineer's certificate regarding the quantities used for different purposes, the matter was remanded back to the adjudicating authority for further clarification and a de-novo adjudication process.

In conclusion, the appeal filed by the appellant was allowed for remand to the adjudicating authority for providing specific details, while the appeal filed by the Revenue was rejected. The decision was made in accordance with the legal principles and precedents cited during the proceedings.