2017 (6) TMI 49 - AT - Central Excise

Tribunal vacates penalty on appeal, extends limitation benefit for Cenvat credit classification dispute.

The Tribunal reconsidered the appeal following High Court directions on denial of credit, vacating the penalty imposed on the appellant. The issue of ... Penalty - benefit of Cenvat credit of duty on ‘bins’ - classification of 'bins' - classified under heading 8474.90 or under 73.08? - Held that: - the demand for reversal of Cenvat Credit is confirmed only to the extent falling within the normal time limit. Rest of the demand is set aside and matter remanded to the adjudicating authority for re-quantification - appeal allowed by way of remand. Issues:1. Reconsideration of appeal due to directions from High Court regarding denial of credit.2. Re-examination of penalty imposed on the appellant based on directions from High Court.3. Classification of goods and eligibility for Cenvat credit.4. Allegation of suppression and imposition of penalty.5. Extension of benefit of limitation to the appellant.Analysis:1. The appeal was reconsidered based on directions from the High Court regarding the denial of credit to the appellant. The High Court directed that the concept of Committee on Disputes (COD) had been done away with by the Supreme Court, necessitating a re-examination of the issue of denial of credit. The Tribunal vacated the previous order and remitted the matter for further consideration to establish if the appellant was wrongfully denied credit.2. The Tribunal re-examined the penalty imposed on the appellant as per the High Court's directions. The penalty imposed was vacated, but since the appellant was permitted to challenge only the penalty and not the confirmation of demand, the latter aspect was not considered in the previous order. This aspect was revisited in the present proceedings based on the High Court's directions.3. The appellant, engaged in manufacturing iron and steel products, availed Cenvat credit on 'bins' procured from another entity. The classification of these bins under Chapter 84 was crucial for the appellant's eligibility for Cenvat credit. The Revenue disputed the classification, proposing a different classification that would disentitle the appellant from the credit. Common proceedings were initiated against both entities, leading to a show cause notice and subsequent confirmation of demand against the appellant.4. The allegation of suppression and imposition of penalty on the appellant were examined. The Tribunal found no malafide on the appellant's part and set aside the penalty. The benefit of limitation was extended to the appellant, and the demand falling beyond the normal time limit was set aside. The case was remanded for re-quantification of the demand within the normal time limit.5. The Tribunal confirmed the demand for reversal of Cenvat credit only within the normal time limit, setting aside the rest of the demand. The appellant was granted the benefit of limitation, and the matter was disposed of accordingly.This detailed analysis highlights the key issues addressed in the judgment, including the reconsideration of the appeal, re-examination of penalties, classification of goods, allegations of suppression, and the extension of the benefit of limitation to the appellant.