2015 (10) TMI 2135 - AT - Central Excise

Denial of CENVAT Credit - Capital goods - Held that - Consultant for the Respondent has now placed a Chartered Engineer Certificate dated 18th March, 2015, wherein it is stated that the cenvat credit availed on capital goods by the Respondent in February, 2008 relating to their non-sheet metal division, which was not sold to M/s Caparo. In these circumstances, I am of the view that the said Certificate needs to be scrutinized by the adjudicating authority. Both sides agree that the matter may be remanded to the adjudicating authority for scrutiny of the said Certificate. In the result, the impugned order is set aside and the matter is remanded to the adjudicating authority about the admissibility of cenvat credit of ₹ 11,77,897/- on the capital goods availed in the month of February, 2008 in the light of the above certificate. After examination of the eligibility of the cenvat credit, the adjudicating authority would decide the other issues raised by the Revenue in their Appeal. - Appeal disposed of.

Issues involved: Appeal against Order-in-Appeal reducing demand for irregular cenvat credit; Consideration of evidences and submissions; Scrutiny of Chartered Engineer's Certificate for cenvat credit eligibility.

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Appeal reducing the demand for irregular cenvat credit availed by the Respondent, who sold their sheet metal division to M/s Caparo. The demand notice alleged that after the sale, the balance 50% of the credit was not admissible, leading to the imposition of a penalty under Section 15 (2) of the Cenvat Credit Rules, 2004. The Commissioner (Appeals) reduced the demand based on the evidence produced, leading to the Revenue's appeal.

2. The Revenue contended that the Commissioner (Appeals) did not consider the contradictory submissions made by the Respondent regarding the transfer of non-sheet metal business to M/s Caparo and the nature of capital goods for which credit was availed. The Revenue argued that the reduction in demand was untenable in law and should be set aside.

3. The Respondent, on the other hand, submitted a revised calculation sheet during the appeal, showing the admissibility of cenvat credit on capital goods at a reduced amount, which was accepted by the Commissioner (Appeals). The Respondent maintained that the credit availed was for items used in their non-sheet metal division, supported by a Chartered Engineer's Certificate.

4. After hearing both sides, the Tribunal found that the Commissioner (Appeals) had allowed cenvat credit to a reduced amount without any appeal from the Respondent. The Tribunal noted the Chartered Engineer's Certificate provided by the Respondent and decided to remand the matter to the adjudicating authority for scrutiny of the certificate to determine the eligibility of the cenvat credit. The Tribunal directed a re-examination of the cenvat credit issue and other matters raised by the Revenue, ensuring a fair hearing for the Respondent.

5. In conclusion, the Tribunal set aside the impugned order, remanding the case for further scrutiny based on the Chartered Engineer's Certificate. The decision highlighted the importance of verifying the eligibility of cenvat credit and ensuring procedural fairness in resolving the issues raised by both parties.

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