Cenvat credit on capital goods and limitation: credit survives at a related job-working unit, and extended time fails without suppression.

Cenvat credit on capital goods was held admissible where the power press was installed in a job-working unit belonging to the same assessee, because credit cannot be denied merely on the ground of location when the units are part of the same business arrangement and the overall duty position is revenue neutral. The dispute also addressed limitation, and the extended period was found unavailable since the credit was disclosed in statutory records and returns, with no suppression, misstatement, or mala fide intent shown. The denial of credit and the consequent demand were therefore set aside on both merits and limitation.

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Issues: (i) Whether Cenvat credit on capital goods could be denied merely because the power press was installed in the assessee's own job-working unit and not in the unit in whose name the credit was taken; (ii) whether the demand was barred by limitation.

Issue (i): Whether Cenvat credit on capital goods could be denied merely because the power press was installed in the assessee's own job-working unit and not in the unit in whose name the credit was taken.

Analysis: The units belonged to the same assessee and the goods manufactured in the job-working unit were cleared on payment of duty through the other unit. Prior Tribunal decisions had held that credit on capital goods cannot be denied merely because the equipment is installed at the job-worker's premises or at an adjacent unit of the same assessee. The arrangement was revenue neutral, since the credit could have been taken and utilized through either unit without changing the overall duty position.

Conclusion: Cenvat credit was admissible and its denial was unsustainable, in favour of the assessee.

Issue (ii): Whether the demand was barred by limitation.

Analysis: The credit had been reflected in the statutory records and returns. The dispute involved a legal interpretation regarding entitlement to credit, and there was no evidence of suppression, misstatement, or mala fide intent. In these circumstances, the extended period was not available to the Revenue.

Conclusion: The demand was time-barred, in favour of the assessee.

Final Conclusion: The appeal succeeded on merits and on limitation, and the denial of credit and consequent demand were set aside.

Ratio Decidendi: Cenvat credit on capital goods cannot be denied merely because they are installed in another unit of the same assessee used for job work, and the extended period of limitation is unavailable absent suppression, misstatement, or mala fide intent.

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