Appellant's Challenge to Denial of Credit Partially Allowed under Cenvat Credit Rules

The appellant filed a ROM against Order No.A/89512/17/SMB dated 12/09/2017, challenging the denial of credit post the amendment in Rule 2 (k) of Cenvat Credit Rules on 07/07/2009. The Tribunal recognized the appellant's bonafide belief based on previous decisions but held that such belief could not persist post the amendment. The demand for the period before the amendment was set aside, while the demand post that date was upheld, resulting in a partial allowance of the appeal with modified penalties. The judgment was delivered on 28/12/2017.

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Issues:
1. Appeal against Order No.A/89512/17/SMB dated 12/09/2017.
2. Benefit of similar items allowed in appellant's own case.
3. Findings on limitation not given in the impugned order.
4. Amendment in Rule 2 (k) of Cenvat Credit Rules on 07/07/2009.
5. Inadmissibility of credit post 07/07/2009.
6. Intent to evade duty by continuing to take credit post 07/07/2009.
7. Validity of appellant's bonafide belief post amendment in Rule 2 (k).

Analysis:
1. The appellant filed a ROM against Order No.A/89512/17/SMB dated 12/09/2017. The appellant's counsel highlighted that similar items were allowed in the appellant's own case previously. The absence of findings on limitation in the impugned order was also pointed out.

2. The Revenue argued that an amendment in Rule 2 (k) of Cenvat Credit Rules on 07/07/2009 rendered certain items inadmissible for credit. It was contended that the appellant's continued credit claim post the amendment indicated an intent to evade duty.

3. The Tribunal considered the appellant's cited decision and noted that the order in the appellant's own case did not consider a decision of the Hon’ble Apex Court, making it an invalid precedence. However, the Tribunal acknowledged that the appellant may have held a bonafide belief based on the previous Tribunal order. This belief could not persist after the 07/07/2009 amendment excluding certain goods from the definition of capital goods.

4. The impugned order was modified, and a new paragraph was inserted regarding limitation. It stated that post 07/07/2009, the appellant could not claim a bonafide belief due to the clarity of the Rule. However, for the period before the amendment, the appellant's bonafide belief based on the Tribunal's decision was recognized.

5. Consequently, the demand for the period up to 07/07/2009 was set aside, while the demand post that date was upheld, with a corresponding modification in the penalty. The appeal was partially allowed based on the above terms, and the ROM application was allowed as well. The judgment was pronounced in court on 28/12/2017.

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