2021 (3) TMI 882 - AT - Central Excise

CENVAT Credit - inputs/capital goods - structural items - welding electrodes - period of dispute is from December 2011 to March 2013 and from January 2014 to March 2016 - HELD THAT - The issue relating to availment of credit by appellant herein on the subject steel items has always been the subject matter of dispute inasmuch notices have been periodically issued for denying the credit. The Credit has been sought to be denied on subject steel items on presumption that ordinarily used for civil construction or construction of factory shed . The submissions made by the appellant is agreed with, that credit has been admittedly allowed by the Lower Adjudicating Authorities, as also upheld by the First Appellate Authority, the denial of credit in the instant case by the same appellate authority would lead to uncertainty and cause serious prejudice to the interest of the assessee, if they are deprived of the beneficial scheme of Cenvat Credit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Dispute over disallowance of Cenvat credit on steel items used in manufacturing process.

Analysis:
The appeals were filed against the Order of the Commissioner (Appeals) disallowing Cenvat credit on structural steel items and welding electrodes used in manufacturing. The Revenue sought to recover the Cenvat credit amount along with interest and penalty. The Adjudicating Authority disallowed the credit on the grounds that these items were not considered as inputs or capital goods.

The authorized representative for the appellant argued that previous Tribunal orders favored their stance on the issue of steel item credit. He cited various legal decisions supporting the admissibility of credit on steel items used in the manufacturing process. The representative also contended that the Chartered Engineer's certificate should have been accepted, and the Show Cause Notices were based on wrong presumptions without any supporting evidence.

The authorized representative for the Revenue reiterated that the credit denial was justified and should be upheld. After hearing both sides and examining the appeal records, the Member (Judicial) referred to previous Tribunal orders that rejected departmental appeals and supported the appellant's position. The Member noted that the issue of credit on steel items had been consistently decided in favor of the assessee by higher authorities.

In a detailed analysis of the case, the Member highlighted previous orders where the denial of credit was overturned in favor of the assessee. The Member emphasized that the denial of credit based on the presumption of steel items being used for civil construction would lead to uncertainty and prejudice the assessee. Referring to relevant legal principles and precedents, the Member concluded that the denial of credit was unwarranted, set aside the impugned orders, and allowed all appeals filed by the assessee with consequential benefits.

In conclusion, the judgment favored the appellant, setting aside the denial of Cenvat credit on steel items used in the manufacturing process, based on legal principles, previous Tribunal orders, and lack of substantial evidence supporting the denial.