2017 (1) TMI 358 - AT - Central Excise

Interest - cenvat credit - various items of structural steel which have been used for fabricating parts of capital goods as well as their supporting structures - Held that - the issue is no more res integra and stand covered in favor of the appellant. The decisions in the appellant s own case for a different period 2016 (1) TMI 917 - CESTAT NEW DELHI , where the appellant has suo motu reversed cenvat credits to the extent of ₹ 80,87,465/- and ₹ 14,10,292/-. Since the reversal is not challenged by the appellant, the same is upheld. However, there is no justification to charge interest on such amount from the date of availing credit till the date of reversal, since we are holding that the credit itself is allowable - appeal allowed - decided in favor of assessee.

Summary

Issues:
1. Availment of cenvat credit on structural steel items used in manufacturing.
2. Demand for reversal of cenvat credit by the department.
3. Grounds of appeal against the demand.
4. Applicability of case laws in support of the appellant's position.

Analysis:
1. The appeal concerned the utilization of cenvat credit on structural steel items by a manufacturer of sponge iron. The dispute revolved around the eligibility of availing cenvat credit on structural steel used for fabricating parts of capital goods and their supporting structures.

2. The department raised a demand for the reversal of cenvat credit amounting to ?1,24,15,516 during a specific period. The demand included amounts already reversed by the appellant prior to the show cause notice issuance.

3. The grounds of appeal against the demand included:
- The appellant had already reversed a significant portion of the demand before the issuance of the show cause notice, and they questioned the justification for charging interest on the reversed amount.
- A portion of the demand related to inputs that were cleared as such, resulting in the automatic reversal of cenvat credit at the time of removal.
- The remaining dispute was regarding inputs used for fabricating capital goods, with the appellant arguing that such credit should be allowable as components of capital goods falling under the definition of inputs.

4. The appellant cited various case laws to support their position, including decisions such as Monnet Ispat & Energy Ltd., Topworth Steels & Power Pvt. Ltd., and others. The Tribunal noted that the issue had been previously addressed in favor of the appellant in similar cases, and the appellant had already reversed certain credits voluntarily.

In the final judgment, the Tribunal upheld the appellant's reversal of cenvat credits that were not contested, stating that there was no basis for charging interest on the reversed amounts. By following precedent decisions, the Tribunal set aside the impugned order and allowed the appeal, confirming the appellant's voluntary reversals.