2017 (1) TMI 544 - AT - Central Excise

Appellate Tribunal allows credit for iron & steel in capital goods fabrication, remands for fresh decision.

The Appellate Tribunal CESTAT NEW DELHI set aside the lower authorities' decision disallowing credit for iron and steel items used in the fabrication of ... CENVAT credit - angles, joists, beam, channels, bars, etc. - denial of credit on placing reliance in the case of Vandana Global Ltd. v. CCE, Raipur [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] - Held that: - the Larger Bench decision stands reversed by the Hon’ble High Court in the case of Mundra Ports & Special Economic Zone Ltd. v. CCE & Cus. [2015 (5) TMI 663 - GUJARAT HIGH COURT] - the said Larger Bench decision is in any case not applicable to the facts of their case inasmuch as the various iron and steel items stands used by them in the fabrication of the capital goods. The said Larger Bench decision was related to the explanation [under Rules] 2(l) and 2(k) which was introduced w.e.f. year 2009 but subsequently withdrawn in 2011, when new rules were framed - The period involved in the present appeal is from June, 2012 to July, 2013 and as such the disputed issue is required to be decided in the light of the newly amended provisions of law. Appeal allowed by way of remand. Issues involved:Cenvatibility of angles, joists, beam, channels, bars utilized in the fabrication of capital goods - Applicability of Larger Bench decision in Vandana Global Ltd. v. CCE, Raipur - Reversal of Larger Bench decision by Hon'ble High Court in Mundra Ports & Special Economic Zone Ltd. v. CCE & Cus. - Applicability of withdrawn explanation under Rules 2(l) and 2(k) introduced in 2009 - Interpretation of newly amended provisions of law for the period from June 2012 to July 2013.Analysis:The issue in the present appeal before the Appellate Tribunal CESTAT NEW DELHI revolves around the cenvatibility of various iron and steel items like angles, joists, beam, channels, bars utilized in the fabrication of capital goods by the appellant. The lower authorities had disallowed the credit based on the Larger Bench decision in Vandana Global Ltd. v. CCE, Raipur. However, the appellant argued that this decision is not applicable to their case as the said decision was related to the explanation under Rules 2(l) and 2(k), which were introduced in 2009 but subsequently withdrawn in 2011. The period involved in the current appeal is from June 2012 to July 2013, and thus, the disputed issue needs to be decided in the light of the newly amended provisions of law.The Appellate Tribunal noted that the Larger Bench decision had been reversed by the Hon'ble High Court in the case of Mundra Ports & Special Economic Zone Ltd. The appellant's advocate emphasized that the iron and steel items used by the appellant in the fabrication of capital goods were not covered by the Larger Bench decision. The Tribunal acknowledged that the disputed issue falls within the period of the newly amended provisions of law, necessitating a fresh decision by the original adjudicating authority after considering the relevant legal provisions.Consequently, the Appellate Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for a fresh decision. The appellant was granted the liberty to produce or rely upon precedent decisions of various High Courts dealing with similar issues. The appeal was allowed by way of remand, providing an opportunity for a reevaluation of the case in light of the applicable legal framework.In conclusion, the judgment highlights the importance of interpreting legal provisions in accordance with the relevant timeline and the applicability of withdrawn rules. It underscores the need for a fresh assessment based on the updated legal framework and allows for the presentation of relevant precedent decisions to support the appellant's case.