Ashtech (India) Pvt. Ltd) Vs Commissioner of Central Excise & Central Tax (CESTAT Bangalore)
Material Facts
The appellant, a manufacturer of PPC cement, was subjected to departmental audit during which it was alleged that inadmissible CENVAT credit had been availed on certain capital goods and input services. A show cause notice was issued proposing denial of such credit along with recovery of interest and imposition of penalty. The adjudicating authority confirmed the demands. The Commissioner (Appeals), by Order-in-Appeal dated 08.07.2019, upheld denial of credit on certain capital goods on the ground that they became immovable property after being embedded to earth. Credit on various input services was also denied on the ground that the expression “setting up” had been omitted from the definition of input service with effect from 01.04.2011. The appellant challenged this order before CESTAT Bangalore.
Procedural History
- Audit objection raised regarding availment of CENVAT credit.
- Show cause notice issued.
- Adjudicating authority confirmed demand with interest and penalty.
- Commissioner (Appeals) upheld denial of credit.
- Appeal filed before CESTAT Bangalore.
Legal Issues
- Whether CENVAT credit on capital goods could be denied because the plant and machinery became embedded to earth after installation.
- Whether CENVAT credit on various input services used for setting up the manufacturing facility was inadmissible after deletion of the expression “setting up” from Rule 2(l) of the CENVAT Credit Rules, 2004 with effect from 01.04.2011.
- Consequential liability to interest and penalty.
Relevant Statutory Provisions
- Rule 2(a) of the CENVAT Credit Rules, 2004 (Definition of Capital Goods).
- Rule 2(l) of the CENVAT Credit Rules, 2004 (Definition of Input Service).
Appellant’s Submissions
