2019 (3) TMI 28 - AT - Central Excise

CENVAT Credit - MS Channels, Angles, Bars falling under Chapter 72 which are used for fabrication of support structures embedded to earth - during the period from June 2006 to December 2006, the appellants have availed first 50% of CENVAT credit of ₹ 14,39,931/- and Education Cess of ₹ 28,814/- on duty paid and 50% credit was again availed on 01.04.2007 - recovery of CENVAT Credit availed alongwith interest and penalty - Held that - The appellant has produced the Chartered Engineer s certificate certifying the usage of various impugned goods but the same was not considered by the Commissioner (A) on the ground that the same has not been produced before the Original Authority. Further, as far as usage of these impugned goods are concerned, it is the Chartered Engineer who is an expert and his certificate should be considered as valuable piece of evidence to prove the usage of the goods. In the present case the Chartered Engineer s certificate was not considered by the Commissioner (A). This case needs to be remanded back to the Original Authority with the direction to verify the usage of the goods in the light of the certificate issued by the Chartered Engineer - appeal allowed by way of remand.

Summary

Issues: Appeal against rejection of CENVAT credit - Usage of goods for fabrication of support structures - Consideration of Chartered Engineer's certificate.

Analysis:
1. Rejection of CENVAT Credit: The appellant, a manufacturer of Sponge Iron, availed CENVAT credit on duty paid items used for fabrication of support structures. A show cause notice was issued demanding CENVAT credit for a specific period, which was confirmed by the Original Authority along with interest and penalty. The appeal against this decision was rejected by the Commissioner (A), leading to the present appeal.

2. Contentions of the Appellant: The appellant argued that the impugned goods were used for supporting structures for capital goods, and being embedded to earth should not disentitle them from CENVAT credit. They presented a Chartered Engineer's certificate verifying the usage of the items, which was not considered by the Commissioner (A) as it was not produced before the Original Authority. The appellant emphasized the importance of this certificate in proving the usage of the goods.

3. Defense by the Respondent: The Learned Assistant Commissioner defended the impugned order without providing specific details in the judgment.

4. Judgment: After hearing both parties and reviewing the evidence, the Judicial Member found that the Chartered Engineer's certificate was crucial in determining the usage of the impugned goods. The failure of the Commissioner (A) to consider this certificate was deemed a significant omission. Therefore, the judgment set aside the impugned order and remanded the case back to the Original Authority. The Original Authority was directed to reexamine the usage of the goods based on the Chartered Engineer's certificate, ensuring compliance with natural justice principles and offering the appellant an opportunity to present supporting documents. The appeal was allowed by way of remand, emphasizing the importance of considering expert evidence in such cases.

This detailed analysis highlights the key issues, arguments presented, and the judicial decision regarding the rejection of CENVAT credit and the consideration of the Chartered Engineer's certificate in the case.