2018 (3) TMI 1478 - AT - Central Excise

Tribunal affirms Commissioner's decision on Cenvat Credit appeal, emphasizing items' role in manufacturing process.

The Tribunal upheld the Commissioner (Appeals) decision to allow the Assessee's appeal regarding the disallowance of Cenvat Credit on items treated as ... CENVAT credit - capital goods - C R Coil, HR Coil, MS Flats etc. - the Revenue had not disputed the User Test of the goods in question as observed by the Commissioner (Appeals) - It is seen that the items in questions were used as supporting structure of ESP Conveyor Support System etc. The Tribunal in recent decision in the case of Commissioner of Customs and Central Excise, Raipur Vs. Bhilai Ispat Private Limited [2017 (4) TMI 206 - CESTAT NEW DELHI] dismissed the appeal filed by the Revenue on the identical issue and held that the allegation in show cause notice is very vague and without any support. Appeal dismissed - decided against Revenue. Issues:1. Disallowance of Cenvat Credit on certain items treated as Capital goods.2. Appeal against the Commissioner (Appeals) order allowing the Assessee's appeal.Analysis:1. The case involved the disallowance of Cenvat Credit by the Adjudicating authority on items like C R Coil, HR Coil, MS Flats treated as Capital goods by the Assessee. The Adjudicating authority confirmed the demand of Cenvat Credit along with interest and imposed a penalty. However, the Commissioner (Appeals) set aside the Adjudication Order and allowed the Assessee's appeal, leading to the Revenue filing an appeal challenging this decision.2. The Revenue relied on the decision of the Larger Bench of the Tribunal in a specific case. The Commissioner (Appeals) based their decision on the finding that the items in question were essential for the functioning of capital goods like ESP Conveyor Support System. The Commissioner (Appeals) referred to previous judicial forums to support their decision, emphasizing the necessity of the items for the manufacturing process. The Tribunal, in a similar recent case, dismissed the Revenue's appeal on an identical issue, further supporting the Commissioner (Appeals) decision.3. The Commissioner (Appeals) highlighted that the Adjudicating Authority's reliance on quasi-judicial/judicial rulings without distinguishing the specific facts of the case was insufficient. The Commissioner (Appeals) emphasized the integral role of the items in the manufacturing process and their classification as capital goods or components. Ultimately, the Tribunal found no reason to interfere with the Commissioner (Appeals) order, rejecting the Revenue's appeal and disposing of the cross objection. The judgment was pronounced openly on a specific date.