2019 (9) TMI 1527 - AT - Central Excise

Tribunal sets aside order, grants appeal based on User Test Principle, certificate validity, and limitation period.

M/s Umang Boards Pvt. Ltd. Versus The Commissioner Central Goods and Service Tax, Jaipur

The Tribunal allowed the appeal, setting aside the challenged order. The decision was based on the satisfactory fulfillment of the User Test Principle for ... CENVAT Credit - Inputs or capital goods? - TMT bars, plates, channels, cement, MS angles, CR coils, joints, shapes and sections, etc. - goods used in construction of civil structures of factory shed and parts thereof - time limitation - HELD THAT:- If the articles on which the appellant herein has availed the cenvat credit fulfil the said User Test Principle, those clearly falls within the definition of capital goods as defined under Rule 2(k) of the Cenvat Credit Rules, 2004 - this principles of User Test has been laid down in various decisions including COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS LTD. [2010 (7) TMI 12 - SUPREME COURT]. The certificate issued by the Chartered Engineer has specifically certified that the impugned goods have been used by the appellant in their various plants and machinery such as boiler, EOT Crane, Ducting, Material Lifting Lifts, Winding drums, etc. This specific mention falsifies the observation of Commissioner(Appeals) that no physical verification about the equipment and the process thereof for manufacture of electrical insulation press boards has been done by the Chartered Engineer. Otherwise also law has been settled that the certificate issued by the authorised Chartered Accountant’s or Chartered Engineer’s having presumption of correctness attached to it cannot be rejected unless and until there is sufficient evidence to rebut the said presumption attached to those certificate. Thus, there are no reason to reject the certificates rather it is held that the certificates as an evidence produced by the appellant proving the satisfaction of the user principle test, as far as the impugned objected goods are concerned. Time Limitation - HELD THAT:- The present is not the case of suppression of facts on part of appellant nor there is any apparent intention of appellant to evade duty. Hence, Department was not entitled to invoke the extended period of limitation. Appeal allowed - decided in favor of appellant. Issues:1. Availment of cenvat credit on various goods for construction purposes.2. Classification of goods as inputs or capital goods for cenvat credit eligibility.3. Validity of certificates issued by Chartered Accountant and Chartered Engineer.4. Application of the period of limitation for demand.Analysis:1. The appellant availed cenvat credit on goods like TMT bars, plates, channels, etc., used in construction of civil structures. The Department proposed reversal of credit, alleging wrongful availment. The issue was whether the goods were solely used for construction or also for plant and machinery support, impacting credit eligibility.2. The central issue was the classification of articles like angles, channels, coils, etc., as inputs or capital goods for cenvat credit. The User Test Principle, clarified by the Apex Court, was crucial. Previous decisions emphasized satisfying this principle for credit eligibility, aligning with Rule 2(k) of the Cenvat Credit Rules, 2004.3. The appellant provided certificates from Chartered Accountant and Chartered Engineer to support credit availment. The Commissioner (Appeals) raised objections, but the Tribunal found the certificates valid. The certificates confirmed usage of goods for plant and machinery support, meeting the User Test Principle.4. Regarding the period of limitation, the show cause notice was issued beyond the prescribed timeframe. The appellant regularly filed returns, and the Department had prior knowledge of credit availment. The Tribunal held that the extended period of limitation was unjustified, as there was no suppression of facts or intent to evade duty.In conclusion, the Tribunal set aside the challenged order, allowing the appeal based on the satisfactory fulfillment of the User Test Principle, validity of certificates, and absence of justification for invoking the extended period of limitation.