2014 (3) TMI 351 - AT - Central Excise

Tribunal allows CENVAT credit on disputed items, rejects extended limitation period

The tribunal ruled in favor of the appellant, setting aside the impugned order that denied CENVAT credit on MS angle, MS beam, etc., claimed as capital ... Eligibility to CENVAT Credit - Invocation of extended period of limitation - Held that:- appellant have no case. But on limitation, they are having a case in spite of the decision of ITC Ltd. (2013 (1) TMI 555 - CESTAT, CHENNAI). As the issue whether the appellant are entitled to take CENVAT Credit on the impugned items during the period or not was in dispute and the same was referred to the Larger Bench of the Tribunal and this Tribunal in Vandana Global (2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) ) decided the mater against the assessee. Therefore, when the issue of eligibility of credit was in dispute during the impugned period, the extended period is not invocable. Accordingly, I hold that in this matter, the extended period of limitation is not invocable - Decided in favour of assessee. Issues:1. Availability of CENVAT credit on MS angle, MS beam, etc., claimed as capital goods.2. Invoking the extended period of limitation for issuing show cause notice.Analysis:Issue 1: Availability of CENVAT credit on capital goods:The appellant appealed against the denial of CENVAT Credit on MS angle, MS beam, etc., claimed as capital goods used for the foundation/structure of the machine/equipment. The lower authorities rejected the claim stating that these items were used in the erection of supporting structures embedded to earth, hence not eligible for credit. The appellant argued that they availed the credit during 2006-08, and the extended period of limitation was invoked in the show cause notice issued on 22.05.2009. The appellant cited the decision in Vandana Global 2013 (293) ELT 186 where the Larger Bench ruled against the assessee. However, the appellant contended that the extended period of limitation should not be invoked as the eligibility of credit was in dispute during the relevant period. The tribunal agreed that the appellant had a case on limitation despite the decision in ITC Ltd. vs. CCE 2012 (258) ELT 292. The tribunal held that since the issue of credit eligibility was in dispute during the relevant period, the extended period of limitation was not applicable. Consequently, the impugned order denying the credit was set aside, and the appeal was allowed.Issue 2: Invoking the extended period of limitation:The appellant argued that the extended period of limitation should not be invoked as the eligibility of CENVAT credit on the disputed items was in question during the relevant period. The appellant relied on the decision in Vandana Global (supra) and Saraswati Sugar Mills 2011 (270) ELT 465 (SC) to support their case. On the other hand, the respondent contended that based on the decision in Vandana Global (supra), the appellants were not entitled to take credit, and the extended period of limitation should be invoked. After hearing both sides, the tribunal held that in this matter, the extended period of limitation was not applicable as the eligibility of credit was disputed during the relevant period. Therefore, the impugned order was set aside, and the appeal was allowed.In conclusion, the tribunal ruled in favor of the appellant, allowing the appeal and setting aside the impugned order that denied the CENVAT credit on the disputed items.