2011 (2) TMI 43 - AT - Central Excise

Tribunal grants waiver for duty, interest, penalty in HR plates credit denial case.

M/s. Hindustan Petroleum Corporation Ltd. Versus The Commissioner of Central Excise Visakhapatnam-I

The Tribunal granted the application for waiver of pre-deposit of duty, interest, and penalty in a case concerning the denial of credit for HR plates used ... Waiver of pre-deposit - credit denied - inputs used in the fabrication of capital goods - Goods like cement and steel items used for laying foundation and for building supporting structures - matter remanded to the Adjudicating Authority to decide the issue afresh in view of the decision of the Larger Bench in the case of Vandana Global Ltd (2010 -TMI - 76147 - CESTAT, NEW DELHI (LB)) - Whether a particular plant or structure embedded to earth can be considered as excisable goods or not has to be determined in the light of the decisions of the Hon'ble Supreme Court on the issue Issues: Application for waiver of pre-deposit of duty, interest, and penalty due to denial of credit in the fabrication of capital goods using HR plates.Analysis:1. The appellant filed an application seeking waiver of pre-deposit of duty amounting to Rs.2,05,38,886/-, interest, and penalty of Rs. one lakh. The dispute arose from the denial of credit for inputs, specifically HR plates, used in the fabrication of capital goods. The credit was disallowed on the basis that the items were utilized in the fabrication of storage tanks permanently embedded in the earth, making them non-excisable. However, it was argued that the same items were also used in the fabrication of supporting structures.2. Both parties referred to a decision by the Larger Bench in the case of Vandana Global Ltd. Vs. CCE, Raipur, where it was clarified that goods like cement and steel items used for laying foundation and building supporting structures cannot be considered as inputs for capital goods or for final products. The Larger Bench emphasized that capital goods, as defined in the Cenvat Credit Rules, must be excisable goods. The issue of whether a plant or structure embedded in the earth can be classified as excisable goods was deemed to be determined based on previous decisions of the Supreme Court.3. In light of the settled issue regarding credit on inputs for the fabrication of capital goods as per the decision of the Larger Bench, the Tribunal set aside the impugned order. The pre-deposit of duty, interest, and penalty was waived, and the matter was remanded to the Adjudicating Authority for fresh consideration in line with the decision of the Larger Bench in the case of Vandana Global Ltd. The appeal was disposed of through remand, awaiting a fresh decision by the Adjudicating Authority.