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2017 (6) TMI 629 - AT - Central ExciseCENVAT credit - MS plates MS angles, MS channels and MS sheets - Held that - the disputed items have been used in the factory to cover the furnace and the chimney which are used to cover the rolling stand and the part of the furnace and classifiable under sub-heading 8514 - in the case of CCE Vs Jindal Stainless Ltd. 2015 (6) TMI 821 - CESTAT BANGALORE , this Tribunal has held that MS plates, sheets, angles, rounds used in workshop for repair work attained the character of component parts and used in conjunction with certain capital goods/machinery used for upkeep of machinery are held to be eligible for CENVAT credit - appeal allowed - decided in favor of appellant.
Issues:
- Eligibility for CENVAT credit on welding rods and other items - Penalty imposition on the authorized representative - Applicability of extended period of limitation - Imposition of penalty under Rule 26 of Central Excise Rules 2002 Eligibility for CENVAT credit on welding rods and other items: The appellant company and its Authorized Representative filed appeals against two orders passed by the Commissioner (Appeals) regarding the eligibility for credit on welding rods and other items. The Headquarters Preventive unit indicated that the appellants had availed ineligible CENVAT credit on MS plates, MS angles, MS channels, MS sheets, and welding rods. The appellant argued that welding electrodes used for repairing damaged grooves should be eligible for credit as capital goods. The Commissioner (Appeals) partly allowed the appeal in favor of welding electrodes but denied credit for other items, imposing a penalty. The appellant contended that the disputed items were used in the factory for production purposes, citing judicial precedents in support. The Tribunal found in favor of the appellant, setting aside the impugned orders and allowing the appeals. Penalty imposition on the authorized representative: A penalty was imposed on the authorized representative for wrongly availing CENVAT credit. The appellant argued that the penalty under Rule 26 of Central Excise Rules 2002 was not sustainable as specific acts were not mentioned in the order or show-cause notice. Citing a relevant case law, the appellant contended that without specifying the nature of acts or omissions, the penalty under Rule 26 should be set aside. The Tribunal agreed with the appellant's argument and set aside the penalty imposed on the authorized representative. Applicability of extended period of limitation: The appellants contested the invoking of the extended period of limitation by the adjudicating authority. They argued that there was no suppression of facts with intent to evade duty payment and that the department failed to provide evidence of material facts suppression. The Tribunal did not specifically address this issue in the judgment, as the focus was on the eligibility for CENVAT credit and penalty imposition. Imposition of penalty under Rule 26 of Central Excise Rules 2002: The appellant challenged the imposition of a penalty under Rule 26 of Central Excise Rules 2002 on the General Manager (Finance). They argued that the penalty was not sustainable as specific acts mentioned in the rule were not identified in the order or show-cause notice. Citing a relevant case law, the appellant contended that without evidence of involvement in excisable goods dealings, the penalty under Rule 26 should be set aside. The Tribunal agreed with the appellant's argument and set aside the penalty imposed under Rule 26. In conclusion, the Tribunal found in favor of the appellant, allowing the appeals and setting aside the impugned orders related to the eligibility for CENVAT credit on welding rods and other items. The penalty imposed on the authorized representative and under Rule 26 of Central Excise Rules 2002 was also set aside based on the lack of specific charges and evidence.
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