2018 (2) TMI 1 - AT - Central Excise

CENVAT credit - steel articles - M.S. Channels - MS. Angles - CHN Channels etc. - it was alleged that the said goods have been used in the construction of plant and machinery and as such cannot be considered to be eligible cenvatable articles - Held that - The issue stands decided in the assessee s own case by the Hon ble Madras High Court in the case of Commissioner of Central Excise and Service Tax Vs M/s. India Cements Ltd. 2014 (7) TMI 881 - MADRAS HIGH COURT wherein it was held that such steel items used for construction activities will satisfy the eligibility criteria as contained in Rule 57Q of Central Excise Rules - credit allowed. Time limitation - Held that - There is no allegation in the show-cause notice reflecting upon any suppression or mis-statement with intent to evade payment of duty on the part of the assessee - in the absence of any malafide demand is barred by limitation. Appeal allowed in toto.

Summary

Issues:
1. Denial of Cenvat credit on steel items used in construction.
2. Limitation period for raising demand.
3. Confirmation of credit on transformer oil.

Analysis:
1. The appellant, engaged in cement manufacturing, faced a show-cause notice proposing to deny Cenvat credit on steel items used for construction, alleging they were not eligible cenvatable articles. The original authority confirmed the demand, upheld by the Commissioner and Tribunal. The issue was whether such steel items qualify as cenvatable inputs, citing relevant case laws. The Tribunal noted the Revenue's own case in the notice supported the use of steel in construction, aligning with previous judgments in favor of the appellant. The lack of documentary evidence from the appellant was deemed unnecessary due to the Revenue's initial allegations, leading to the allowance of Cenvat credit.

2. Apart from the merits, the appellant challenged the order on limitation regarding a duty demand raised in 1996. The normal limitation period was six months, and the demand, barring a few days, exceeded this limit. As there was no allegation of suppression or misstatement with intent to evade duty, and the credit was reflected in statutory records, the majority of the demand was considered time-barred. Absence of malafide intentions supported the appellant's argument on limitation, resulting in the majority of the demand being barred by limitation.

3. With the appeal allowed on merits, the impugned orders were set aside entirely, and the appeal was allowed with consequential reliefs. Additionally, the confirmation of credit on transformer oil, not challenged by the appellant, was acknowledged, settling the issue related to transformer oil credit. The judgment provided a comprehensive analysis of the issues, including the eligibility of Cenvat credit on steel items, the limitation period for demand, and the confirmation of credit on transformer oil, ultimately favoring the appellant on both substantive and procedural grounds.