ITC Ltd. Vs Pr. Commissioner of Central Tax Rangareddy – GST (CESTAT Hyderabad)
The CESTAT Hyderabad allowed the appeal filed against the Order-in-Original dated 31.03.2013, which had disallowed CENVAT credit of ₹1,89,28,243 on capital goods and inputs used for setting up an Air Separation Plant, confirmed interest under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944, and imposed an equal penalty under Rule 15 of the CENVAT Credit Rules read with Section 11AC of the Act.
The appellant, engaged in the manufacture of paper and paper boards, entered into an agreement with Inox Air Products Ltd. for setting up an Air Separation Plant within its factory to produce oxygen and other industrial gases required for manufacturing. Machinery, components, parts, and accessories were supplied under Central Excise invoices naming the appellant as consignee, received in the factory, and used for erection and commissioning of the plant. CENVAT credit was availed during October 2007 to April 2009. The Show Cause Notice alleged that the parts lost their identity in the plant, did not belong to the appellant, were procured by Inox and used in an immovable plant, and that Inox had not discharged excise duty on the Air Separation Plant.
