Cenvat credit on boiler components and structural items allowed; prior disclosure defeated limitation and suppression allegations.

Boiler components, structural items and refractory materials used integrally in assembling an AFBC boiler at site were treated as eligible for Cenvat credit, with the Tribunal applying the principle that such items form part of the boiler system under the Cenvat Credit Rules and the Central Excise Tariff. Prior disclosure to the department and a response from the jurisdictional officer negatived any allegation of suppression, so the extended limitation basis failed. On that reasoning, the demand, interest and penalty were set aside and relief followed in favour of the assessee.

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Issues: (i) Whether Cenvat credit was admissible on boiler parts, structural items and refractory materials used in assembling the boiler at site. (ii) Whether the demand was barred by limitation on account of disclosure to the department and absence of suppression.

Issue (i): Whether Cenvat credit was admissible on boiler parts, structural items and refractory materials used in assembling the boiler at site.

Analysis: The dispute concerned goods used in the fabrication and erection of an AFBC boiler at site. The Tribunal applied the settled position that boiler components and structural items used as part of the boiler system are to be treated as parts of the boiler under Chapter 8402 of the Central Excise Tariff Act, 1985, and that such items may qualify as inputs or capital goods under Rule 2(k)(iii) and Rule 2(a) of the Cenvat Credit Rules, 2004. Relying on the cited precedents, the Tribunal accepted that structural steel items used for support structures integral to the boiler were eligible for credit, and the same reasoning supported credit on refractory materials.

Conclusion: Cenvat credit was held admissible on the boiler parts, structural items and refractory materials, in favour of the assessee.

Issue (ii): Whether the demand was barred by limitation on account of disclosure to the department and absence of suppression.

Analysis: The Tribunal found that the assessee had sought clarification from the department before availing credit and had received a positive response from the jurisdictional officer. In these circumstances, the department could not allege suppression of facts. The existence of prior disclosure negated the allegation of wilful suppression and supported the plea of limitation.

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

Final Conclusion: The impugned demand, interest and penalty were set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: Boiler components and structural items used integrally in the fabrication of a boiler system are eligible for Cenvat credit, and prior disclosure to the department negatives suppression for the purpose of limitation.

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