Tribunal modifies order on penalties pre/post 07.07.2009, credits on cement, directs quantification.

The Tribunal modified the order by setting aside the demand, interest, and penalties for the period before 07.07.2009 but sustained penalties for the period after that date. The appellant was found eligible for credit on cement before the specified date but not after, as it was deemed ineligible post-amendment excluding cement from inputs. The Tribunal directed quantification of penalties for the post-amendment period and partly allowed the appeals.

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Issues:
Challenge to disallowance of credit by Commissioner (Appeals) for irregular availment of CENVAT credit on cement as capital goods.

Analysis:
The appeal was filed challenging the order disallowing credit by the Commissioner (Appeals) due to irregular availment of credit on cement as capital goods used for foundation and construction works. Show Cause Notices were issued alleging irregular availment of CENVAT credit, leading to confirmation of demand, interest, and penalties by the original authority. The appellant argued for credit availment based on the period involved and the amount of credit taken, presenting details in a table format for different appeals.

The appellant's counsel highlighted a previous Tribunal decision allowing credit on cement, except for a specific amount, prior to 07.07.2009, which was the date when the definition of inputs was amended to exclude cement. The Tribunal considered divergent views on the eligibility of credit on cement before the amendment, referencing judgments like Maruthi Suzuki Ltd. and Ramala Sahkari Chini Mills Ltd. The Tribunal also mentioned the decision in Mandra Ports & SEZ Ltd. vs. CCE & Cus where credit on cement was deemed admissible. Following the precedent set in the appellant's own case, the Tribunal held the appellant eligible for credit before 07.07.2009 but not for the amount post that date.

The Department's representative relied on a Larger Bench decision and argued against the admissibility of credit on cement, supporting the penalties imposed. The Tribunal, after considering the arguments, set aside the demand, interest, and penalties imposed for the period before 07.07.2009. However, the penalties for the period after 07.07.2009 were sustained due to the appellant continuing to avail ineligible credit post the amendment excluding cement from inputs. The Tribunal directed the Range Officer to quantify the penalty for the post-amendment period and partly allowed the appeals accordingly.

In conclusion, the Tribunal modified the impugned order by setting aside the demand, interest, and penalties for the period before 07.07.2009 while sustaining the penalties for the period after that date, as the appellant availed ineligible credit post-amendment despite the decision disallowing such credit under the category of capital goods.

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