2018 (5) TMI 653 - AT - Central Excise

CENVAT credit - inputs - cement, TOR steel and structural steel - Held that - in the case of Mundra Ports and Special Economic Zone Ltd (supra), Hon ble High Court of Gujarat, it was held that prior to 07.07.2009, the CENVAT credit availed on cement and steel which are used in the form of construction of jetty is to be allowed as jetty is used for providing output service taxed - the CENVAT credit availed on cement, TOR steel, structural steel during the period prior to 07.07.2009 is to be considered as eligible for CENVAT credit, as they were used for setting up of a factory. CENVAT credit - structural steel - time limitation - Held that - there is no dispute as to the fact that appellant had filed monthly returns with the authorities indicating therein the receipt of the inputs and the credit availed by them. When it is also a fact that the entire demands raised on the appellant is on scrutiny of AR-1 returns, the appellant has made out a case for setting aside the demand of ₹ 52,09,536 on the ground of limitation. CENVAT credit - GTA Services - these services were used by the appellant in relation to setting up of a factory - Held that - CENVAT credit needs to be allowed in respect of input services used for setting up of a factory - credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Availment of CENVAT credit on inputs like cement and steel, and input services.
2. Contestation of show-cause notice proposing recovery of CENVAT credit.
3. Dispute regarding the eligibility of CENVAT credit on GTA services and input services.
4. Adjudication of demands raised, interest, and penalties imposed.
5. Legal precedents cited for supporting arguments.
6. Decision on setting aside the demands and allowing the appeal.

Analysis:
1. The appeal challenged the order-in-original regarding the availed CENVAT credit on inputs and services during the period January 2009 to December 2010. The appellant contended that the inputs were used for setting up a new factory, but the adjudicating authority rejected the contentions and confirmed the demands raised with interest and penalties. The appellant relied on legal precedents to support their claims, emphasizing the eligibility of CENVAT credit on cement, steel, and input services.

2. The appellant argued that the demands raised by the lower authorities should be set aside. They highlighted that the law regarding the use of cement and steel for construction activities is well-established based on legal judgments. The appellant referenced specific cases to support their position, asserting that the CENVAT credit should be allowed for inputs used in setting up a new factory premises. The appellant also cited relevant legal judgments to strengthen their argument regarding the eligibility of CENVAT credit on various services.

3. The learned A.R. reiterated the findings of the lower authorities, supporting the decision to uphold the demands raised on the appellant. However, the appellate tribunal carefully considered the submissions made by both parties and analyzed the show-cause notice in detail. The tribunal found that the issue regarding the eligibility of CENVAT credit on inputs was no longer resintegra based on legal precedents and judgments provided by the appellant.

4. After thorough consideration, the tribunal concluded that the appellant had a valid case for availing CENVAT credit on cement, TOR steel, and structural steel used for setting up the factory premises. The tribunal also addressed the dispute regarding the CENVAT credit on input services, citing legal decisions that supported the appellant's position. Consequently, the tribunal held that the impugned order was unsustainable on merits and limitation, leading to the decision to set aside the demands and allow the appeal.

5. The tribunal's decision was based on a comprehensive analysis of the legal arguments presented by both parties, as well as the relevant legal precedents and judgments cited during the proceedings. By carefully examining the facts, submissions, and legal framework, the tribunal arrived at a reasoned decision to grant relief to the appellant and set aside the demands raised by the lower authorities.

This detailed analysis of the judgment highlights the key issues, arguments presented, legal precedents cited, and the tribunal's decision, providing a comprehensive understanding of the case and its outcome.