2011 (8) TMI 978 - AT - Central Excise

Dismissal of appeal due to lack of evidence for plastic flooring as Cenvat credit input

The appeal was dismissed as the appellant failed to provide evidence that the plastic flooring claimed for Cenvat credit was used in the manufacture of ... Cenvat credit - input used in manufacture - capital goods - inevitable necessity - integral part of capital goods - disallowance of creditCenvat credit - input used in manufacture - capital goods - inevitable necessity - integral part of capital goods - Claim for Cenvat credit on plastic flooring (Heading 391810.90) was not admissible as either input used in manufacture or as capital goods. - HELD THAT: - Appellant claimed Cenvat credit of duty paid on plastic flooring. The adjudicating and appellate authorities found that the plastic flooring was neither an aid to manufacture nor an inevitable or integral part of any capital goods of the assessee, and therefore did not qualify for credit. The appellant did not provide reasoning or evidence to establish that the flooring was used in the manufacture of capital goods or formed components or parts thereof as required by law. The appellate authority rejected the claim and, while reducing penalty, sustained the disallowance of credit. In light of the settled position relied upon, the Tribunal disposed of the appeal on merits in the absence of the appellant and affirmed the disallowance of Cenvat credit. [Paras 2, 3, 5]Appeal dismissed; claim for Cenvat credit on plastic flooring disallowed.Final Conclusion: The Tribunal, applying the authorities and the findings of the lower authorities, dismissed the appeal and upheld the disallowance of Cenvat credit on the plastic flooring; the penalty was noted to have been reduced by the appellate authority. Issues:1. Cenvat credit claim for plastic flooring as input.2. Denial of Cenvat credit claim by authorities.3. Dismissal of appeal based on lack of evidence supporting the claim.Analysis:1. The appeal in question, which is three years old, was disposed of due to the judgment of the Apex Court in the case of Saraswati Sugar Mills. The judgment stated that there was no necessity to keep the appeal pending, leading to its disposal even in the absence of the appellant. The primary issue revolved around the claim of Cenvat credit for plastic flooring as an input, amounting to Rs. 40,850. The appellant failed to provide reasoning or evidence to establish that the plastic flooring was used in the manufacture of capital goods or as components thereof, as required by law.2. The JCDR explained that the appellant's claim for Cenvat credit on plastic flooring was not substantiated with the necessary proof. The Show Cause Notice (SCN) highlighted that the plastic flooring, falling under a specific heading, was claimed as an input for which the credit was sought. Both the adjudicating authority and the appellate authority denied the claim, emphasizing that the plastic flooring was not integral to the manufacture of capital goods. The appellate authority specifically mentioned that the plastic flooring was used after the final product was ready for dispatch, indicating its ineligibility for Cenvat credit.3. The authorities below, as per the appellate order, found no merit in the appellant's argument that the plastic flooring should be considered as capital goods. The observations made during the proceedings indicated that the plastic flooring did not serve as an aid in the manufacturing process nor was it an essential requirement for production. Consequently, the appeal was dismissed based on the lack of evidence and reasoning supporting the classification of plastic flooring as capital goods. The penalty was reduced, but the Cenvat credit claim was ultimately disallowed, leading to the dismissal of the appeal.