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TMI Blog2024 (4) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... a case that the items do not fall under 84, 85 of Central Excise Tariff Act 1985. In the case of M/s. HYUNDAI MOTOR INDIA LTD. VERSUS CCE ST LTU CHENNAI AND VICA-VERSA [ 2015 (12) TMI 940 - CESTAT CHENNAI] the Tribunal considered the issue of availment of cenvat credit on items used for setting up paint shop and held that credit is eligible. In the case of M/S OMAX AUTO LIMITED VERSUS CCE, DELHI-III [ 2013 (8) TMI 301 - CESTAT NEW DELHI] it was held that structures used in paint complex which is an integral part of the manufacture of motor vehicles used in the fabrication of paint complex is eligible for credit. The denial of credit is on the basis of erroneous appreciation of facts and law. The issue on merits is answered in favor of assessee. Extended period of limitation - Suppression of facts or not - HELD THAT:- The demand has been raised on the basis of figures as reflected in the books of accounts maintained by the appellant. There is no positive act of suppression established by the department against the appellant. In the case of PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [ 1995 (3) TMI 100 - SUPREME COURT] the Hon ble Supreme Court while consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hop and availed CENVAT credit on these items under the category of capital goods. Most of these items fall under Tariff Heading 84 85 and thus would be eligible for credit under the category of capital goods. The department has analysed whether the entire Paint shop set up by the appellant is an excisable goods so as to be eligible for credit under the category of capital goods. They ought to have analysed whether the machinery parts components used by the appellant for the Paint shop is eligible for credit as capital goods. The appellant has not availed credit on Paint shop. Instead the appellant has availed on the machineries, parts and components which were procured and used for fabricating and setting up the paint shop. Such machineries parts and components by themselves are excisable goods and would be eligible for classification under Chapter Heading 84 85 of Central Excise Tariff Act 1985. Merely because these were fixed, assembled and fabricated at site as per the requirement of the appellant they do not fall out of the category of capital goods. The adjudicating authority has erroneously analysed whether the paint shop is an excisable goods and thus eligible for credit. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plant visit. The Ld. Consultant submitted that the appellant has filed ER-1 return wherein the details of CENVAT credit availed on inputs and capital goods were furnished as an annexure to the returns. The appellant has not suppressed any facts from the department. 5. It is a settled legal principle that when full facts have been disclosed to the department there cannot be an allegation of suppression. The decision in the case of Pushpam Pharmaceuticals Vs. CCE, Bombay 1995 (78) ELT 401 SC was relied by the Ld. Consultant to submit that when facts are known to both parties there cannot be allegation or suppression. The Tribunal in the case of M/s. The Ramco Cements Ltd., Vs. Commissioner of GST Central Excise, Thiruchirappalli 2024 (2) TMI 1248 CESTAT Chennai has followed this decision to set aside the demand of duty and interest for the extended period. 6. The entire demand has been quantified on the basis of the figures taken from the books of accounts maintained by the appellant. This itself would show that the appellant has not suppressed any facts. Further, the issue is interpretational in nature as the department considered the issue whether the credit is eligible on the pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e details of the goods on which the credit has been availed. Most of the goods fall under Chapter Heading 84 or 85. Some of the goods fall under Chapter Heading 73. It is explained by the ld. Consultant that these impugned items were purchased and the paint shop was assembled and fabricated at site. The department instead of analyzing whether these items fall under the category of capital goods and eligible for credit has analysed whether the paint shop as assembled at site is an excisable goods. The appellant has not availed credit on paint shop . They have availed credit on various machinery, parts, and components which have been used to set up paint shop. Some structural items falling under Chapter 73 have also been used for the fabrication and setting up of entire paint shop which is integral to carry out the activity of painting of cars. The department does not have a case that the items do not fall under 84, 85 of Central Excise Tariff Act 1985. As per rule 2 (a) of CENVAT Credit Rule the definition of capital goods : Rule 2 (a) of Cenvat Credit Rules, 2004 describes Capital Goods as (A) the following goods, namely, (i) All goods falling under Chapter 82, Chapter 84, Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in this case is about availability of capital goods Cenvat credit taken under 14 invoices issued by M/s. Kamal Envirotech Pvt. Ltd. who under those invoices had supplied various items falling under Chapter 85 required for fabrication and erection of paint shop/spray paint machinery. It is not the department s contention that the goods received under these invoices are not the goods falling under Chapter 84 or 85. The department s objection is that these items were used in the factory for fabrication and erection of paint shop, which being fixed to the earth structure, is not excisable and hence these items are not eligible for Cenvat credit. In my view, this objection by the department is absurd, as for permitting capital goods Cenvat credit, what has to be seen is as to whether the goods fall in the Chapters specified in the definition of capital goods or are the items specifically mentioned in the definition of capital goods and secondly whether those goods were used in the factory. The purpose for which the goods were used and whether after use the goods became part of plant and machinery fixed to/embedded to the earth is not relevant. If Revenue s contention is accepted, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I 107 Supreme Court (supra). The Ld. Consultant appearing for appellant has correctly pointed out that the said decision is with regard the issue as to whether the activity of fabrication and assembling of paint shop at site would amount to manufacture so as to make paint shop chargeable to excise duty. It was held by the Hon ble Apex Court that paint shop being attached to the earth is not excisable goods. The Tribunal in the case of M/s. Omax Auto Ltd., Vs. CCE, Delhi III 2013 (8) TMI 301 CESTAT New Delhi has distinguished this decision. The ratio laid in the case of Commissioner of Central Excise, Mumbai Vs. Josts Engineering Co Ltd., 2002 (146) ELT (98) TMI 107 (Supreme Court) is not applicable to the facts of this case. 14. We therefore find the denial of credit is on the basis of erroneous appreciation of facts and law. The issue on merits is answered in favor of assessee. 15. The entire demand was raised invoking the extended period. The Ld. Consultant pointed out that in the SCN there is no allegation that the appellant has suppressed facts with intent to evade payment of duty. Para 10 of show cause notice is reproduced as under: The fact of availment of credit on the mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out requiring a manufacturer to disclose the turnover of exempted goods. Even assuming it was, the appellant could not be held guilty of suppression when the law itself was not certain. 4. Section 11A empowers the Department to re-open proceedings if the levy has been short-levied or not levied within six months from the relevant date. But the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts. The meaning of the word both in law and even otherwise is well known. In normal understanding it is not different that what is explained in various dictionaries unless of course the context in which it has been used indicates otherwise. A perusal of the proviso indicates that it has been used in company of such strong words as fraud, collusion or wilful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in which it has been used it has to be construed strictly. It does not mean any omission. The act must be deliberate. In taxation, it can have only one meaning that the correct information was not di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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