2017 (9) TMI 19 - AT - Central Excise

CENVAT credit - structural items like Angles, H.R. Sheets, Shapes and Sections, Channels, H.R. Plates, etc - case of Revenue is that according to the Budget 2009-10 exclusion of Cement, Angles, Channels, Centrally Twisted Deformed Bass (CTD) or Thermo Mechanically Treated Bar (TMT), etc. were excluded from definition of Rule 2(k) of the Cenvat Credit Rules, 2004 - Held that - the Order-in-Appeal dated 31/03/2015 was decided relying on the decision of Larger Bench of this Tribunal in the case of Vandana Global Limited 2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) , where it was held that the clarificatory amendment made to Explanation 2 to Rule 2(k) in 2009 has to be held to be retrospectively applicable, is not sustainable - credit allowed - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues: Admissibility of Cenvat credit on structural items like Angles, H.R. Sheets, Shapes, and Sections used for construction of factory shed and plant machinery.

Analysis:
The appeal was filed by M/s Apollo Metalex Pvt. Ltd. against an Order-in-Appeal passed by the Commissioner of Central Excise & Service Tax. The Revenue observed that the appellant had availed Cenvat credit on items like Angles, H.R. Sheets, Channels, Plates, etc., used for construction purposes. A Show Cause Notice was issued proposing to deny the Cenvat credit based on the amendment in the Budget 2009-10. The Original Authority upheld the denial of Cenvat credit based on a Larger Bench decision in the case of Vandana Global Limited. The Commissioner (Appeals) also relied on the same ruling and dismissed the appeal. The appellant then approached the Tribunal challenging the decision.

During the hearing, the appellant's counsel cited a ruling by the Hon'ble High Court of Gujarat, which stated that the amendment made in the Cenvat Credit Rules, 2004, was not clarificatory. The counsel argued that this ruling should be considered instead of the Larger Bench decision in the Vandana Global Limited case. The Revenue supported the impugned Order-in-Appeal.

After considering the arguments and the ruling of the Hon'ble High Court of Gujarat, the Tribunal found that the decision in the Order-in-Appeal, which relied on the Vandana Global Limited case, was not sustainable. Therefore, the Tribunal set aside the confirmation of demand for the recovery of Cenvat credit amounting to ?1,32,861/- along with interest and penalty. The appeal was allowed, and the appellant was entitled to consequential relief in accordance with the law.