Cenvat credit on structural steel denied prospectively, while extended limitation failed due to departmental knowledge of invoices and records.

Cenvat credit on structural steel items used in manufacture was held inadmissible from 7 July 2009, because the amendment to the definition of input was applied prospectively and not treated as clarificatory or retrospective. On limitation, the extended period could not be invoked since invoices and Cenvat records had already been produced before the jurisdictional Superintendent, showing departmental awareness of the credit availed and negating suppression. The demand for the normal period was maintained, while the extended-period demand was set aside.

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Issues: (i) whether Cenvat credit on structural steel items used during the relevant period was admissible after the amendment to the definition of input with effect from 7 July 2009; (ii) whether the demand was barred by limitation and whether the extended period could be invoked.

Issue (i): whether Cenvat credit on structural steel items used during the relevant period was admissible after the amendment to the definition of input with effect from 7 July 2009.

Analysis: The earlier view treating the amendment as clarificatory and retrospective was not accepted. The amendment was held to govern the entitlement from 7 July 2009 onwards, and the credit on structural steel items such as M.S. ingots, beams, channels, HR plates and M.S. joists was not admissible for the period covered by the post-amendment regime.

Conclusion: The credit was held inadmissible from 7 July 2009 onwards.

Issue (ii): whether the demand was barred by limitation and whether the extended period could be invoked.

Analysis: The invoices and Cenvat records had been produced before the jurisdictional Superintendent in connection with the duty credit reversal certificate, and the department was therefore found to be aware of the availment of credit on the disputed steel items. On that basis, suppression was not established for invoking the extended period.

Conclusion: The demand for the extended period was set aside and the normal period demand was sustained.

Final Conclusion: The appeal succeeded only in part, with relief granted on limitation while the demand for the normal period remained recoverable.

Ratio Decidendi: Where the department already had knowledge of the relevant credit availed on the basis of verified invoices and records, the extended period of limitation cannot be sustained; and the amendment to the input definition applies prospectively from its effective date for determining admissibility.

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