Case Law Details
Thiru Arooran Sugars Ltd. Vs Commissioner of Central Excise (CESTAT Chennai)
The credit on MS items used for structural supports has been denied alleging that after fabrication and fixing to the earth, these become immovable property. The department has also applied amendment dt. 07.07.2009 retrospectively so as to deny the credit. In the case of the Mundra Ports & Special Economic Zone Ltd. Vs CCE & Cus. – 2015-TIOL-1288-HC-AHM-ST = 2015 (39) STR 726 (Guj.), it has been observed that the Tribunal has not explained in the decision of Vandana Global (supra) as to what is the aid used for considering that the amendment brought forth has retrospective application. These aspects have been analyzed in various decisions and also in the recent decision of the jurisdictional High Court in the assessee’s own case. Following the same, we hold that the disallowance of credit is unjustified.
FULL TEXT OF THE CESTAT JUDGMENT
The issue involved in both these appeals being the same were heard together and disposed by this common order. The parties hereinafter referred to as assessee and department for the sake of convenience.
2. The brief facts of the case are that the assessee is engaged in manufacture of sugar, molasses, rectified spirit etc. and were availing the facility of cenvat credit on capital goods / inputs used in their factory. On verification of records during the period April 2008 to December 2008 and for the period from February 2009 to April 2009, it was noticed that they had taken credit on H.R. Plates, H.R. Sheets, M.S. Channels, M.S. Joists etc. used as structural items in their factory. The department was of the view that as these items fall under Chapter 72 and are not covered by the definition of ‚capital goods‛ under Rule 2 of Cenvat Credit Rules, 2004, the asessee is not eligible for credit under the category of ‚capital goods‛; that these items cannot be considered as ‘inputs’ for the manufacture of capital goods. Show cause notices were issued for different periods proposing to disallow the credit and for recovery of the same along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and also imposed penalty under Rule 15 (1) of CCR 2004. In appeal, the Commissioner (Appeals) upheld the demand but however set aside the penalty. The assessee is in Appeal No. E/356/2011 against the confirmation of demand and interest. The Department is in Appeal No.E/416/2011 against the setting aside of penalty by the Commissioner (Appeals).
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