2018 (6) TMI 305 - AT - Central Excise

CENVAT Credit for an amount of ₹ 1,04,428/- which was reversed by them and intimated to the departmental authorities - demand of interest - Held that - It is undisputed by the assessee before the lower authorities that they had availed CENVAT Credit on these two amounts which were not due to them and nothing was brought on record to show that they had not utilized the said CENVAT Credit during the period in question - demand of Interest seems to be correct and is upheld. Demand of ₹ 33,46,191/- in respect of interest, for availing CENVAT Credit which was reversed by the assessee-appellant in December 2008 and by a letter dated 28.01.2009 was intimated to the authorities - Held that - If assessee-appellant have contested the reversal of ₹ 33,46,191/- on limitation, they would have succeeded. The argument on limitation for seeking setting aside the interest and penalty is an accepted proposition - the interest demanded and confirmed by the lower authorities on an amount of ₹ 33,46,191/- is incorrect and not sustainable. CENVAT Credit on overhead cranes of ₹ 3,04,642/- during the period May 2007 to December 2008 - demand of Interest and penalty as well - Held that - The inputs like M.S.Angles, channels, bars, concrete mixer etc. are eligible inputs for availment of CENVAT Credit - demand set aside - Interest liability and penalty also set aside. Reversal of CENVAT Credit on GTA services - Held that - The issue needs reconsideration by the adjudicating authority as it is the claim of the appellant-assessee before Tribunal as was also before the lower authorities that the said services were utilized for inward presentation of raw materials . Both the lower authorities have not considered this submission and confirmed the demands without any reasoning on the plea raised by appellant-assessee - matter remanded. Appeal disposed off.

Summary

Issues:
1. Contest between Revenue and Assessee on CENVAT Credit availed and denied.
2. Dispute over interest and penalty on reversed CENVAT Credit amounts.
3. Adjudication on CENVAT Credit for overhead cranes and GTA services.

Analysis:
1. The appellant-assessee availed CENVAT Credit during May 2007 to March 2009, which was challenged by the authorities. The appellant reversed certain amounts of CENVAT Credit during the proceedings. The demand for reversal was contested, leading to a dispute over interest and penalties. The initial demands on capital goods and inputs were conceded by the appellant. However, the contest continued regarding interest and penalties, especially on GTA services. The adjudicating authority confirmed the demands with interest and penalties, leading to appeals from both parties.

2. Regarding the interest and penalty on the reversed CENVAT Credit amounts, the appellate authority upheld the interest liability but reduced the penalty. The tribunal found that the appellant was not contesting the tax liability on a specific amount that was reversed by them. The tribunal upheld the interest demand on this amount as the appellant had availed the CENVAT Credit, and there was no evidence to suggest otherwise. However, for another reversed amount, the tribunal found in favor of the appellant based on a limitation argument supported by a previous court decision, thereby modifying the order to exclude interest and penalties.

3. Concerning the CENVAT Credit on overhead cranes and GTA services, the tribunal examined the evidence provided by the appellant. For the overhead cranes, the tribunal accepted the Chartered Engineer's certificate, concluding that the cranes were essential capital assets, making the related inputs eligible for CENVAT Credit. Therefore, the demand on this amount was set aside along with associated interest and penalties. However, for the GTA services, the tribunal noted a lack of consideration by the lower authorities regarding the appellant's claim that the services were used for transportation of raw materials. As this issue required further review, the tribunal remanded it back to the adjudicating authority for reconsideration without imposing penalties.

In conclusion, the tribunal disposed of the appeals, upholding certain demands while setting aside others based on the merits of each issue. The decision was made after a thorough examination of the facts, legal arguments, and evidence presented by both parties.