Tribunal rules pre-2009 iron/steel eligible for CENVAT credit, no malafide intent shown. Appellant entitled to credit on welding materials.

The Tribunal allowed the appeal, holding that iron and steel articles used before 07/07/2009 were eligible for CENVAT credit regardless of their specific use. The demand for duty was barred by limitation as there was no evidence of malafide intention. The appellant was entitled to CENVAT credit on welding electrodes and gases used in manufacturing. The impugned order was set aside, providing consequential relief to the appellant.

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Issues:
1. Eligibility of CENVAT Credit on iron and steel articles used in manufacturing.
2. Applicability of limitation period for demanding duty.
3. Eligibility of CENVAT Credit on welding electrodes and gases used in manufacturing.

Analysis:
1. The main issue in this appeal was whether the iron and steel articles used by the assessee were eligible for CENVAT credit. The Tribunal referred to the decision in Vandana Global Limited case, which stated that even if these items were used as supporting structurals, they would not be modvatable. However, the Tribunal noted that the decision was overruled by the Hon’ble Gujarat High Court in the Mundra Ports & Special Economic Zone Ltd. case. The High Court held that the amendment issued on 07.07.2009 was not clarificatory and would apply prospectively. Therefore, the iron and steel articles used before this date were entitled to credit, regardless of their specific use in construction or as supporting structurals.

2. Apart from the merits of the case, the Tribunal also considered the limitation period for demanding duty. The show cause notice was issued in September 2008 for the period between September 2007 and December 2007. The lower authorities invoked the extended period based on the belief that the appellant was aware of the inadmissibility of the credit. However, the Tribunal found that there was no evidence of malafide intention on the part of the assessee. The appellant had disclosed the credit in their records and returns, and there were previous decisions in their favor during the relevant period. Therefore, the demand was considered to be barred by limitation.

3. The issue of CENVAT Credit on welding electrodes and gases used in manufacturing was also addressed. The Tribunal cited decisions from various High Courts, such as the Chhattisgarh High Court and the Rajasthan High Court, which allowed credit on welding electrodes used for repair and maintenance purposes. Following these precedents, the Tribunal held that the appellant was entitled to the credit for welding electrodes and gases used in their manufacturing process.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal and providing consequential relief to the appellant. The judgment was pronounced on 27/07/2016.

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