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

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 in the fabrication of capital goods. Citing a decision by the Larger Bench, it was determined that items like HR plates, when used in the fabrication of supporting structures, qualify as inputs for capital goods. The Tribunal set aside the initial order, waived the pre-deposit amounts, and remanded the matter to the Adjudicating Authority for reconsideration in accordance with the precedent established by the Larger Bench.

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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.

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