Appellant wins Cenvat credit dispute for iron & steel items used in capital goods fabrication

The Tribunal ruled in favor of the appellant in a dispute over Cenvat credit for iron & steel items used as supporting structurals, rejecting the Revenue's denial based on a Larger Bench decision. The Tribunal held that the items were cenvatable when used in the fabrication of capital goods, citing precedents and rejecting the Revenue's arguments. Additionally, the Tribunal found the demand to be time-barred, as there was no evidence of malafide intent by the appellant, ultimately setting aside the order and granting relief to the appellant.

---

---

Issues:
Dispute over Cenvat credit availed by the appellant for iron & steel items used as supporting structurals, denial of credit by Revenue, validity of Larger Bench decision, applicability of limitation period for the demand.

Analysis:
1. The dispute in the appeal pertains to the Cenvat credit availed by the appellant for iron & steel items used as supporting structurals. The Revenue denied the credit based on the Larger Bench decision in the case of Vandana Global, which held such items to be non-cenvatable. Consequently, a demand of approximately Rs. 1,04,98,954 crores was confirmed against the appellant, along with interest and penalty.

2. The appellant argued that the iron & steel items were used in the fabrication of capital goods, which is allowed under the law declared by the Larger Bench itself. Additionally, the appellant cited the decision of the Hon’ble Gujarat High Court in the case of Mundra Ports, which did not uphold the Larger Bench decision. Referring to the Allahabad Tribunal decision in the case of Bajaj Hindustan, the appellant contended that similar items were held to be cenvatable when used for fabrication of capital goods. The appellant also highlighted that the period under appeal was prior to the show cause notice, thus challenging the invocation of the longer limitation period.

3. The Revenue, represented by the Assistant Commissioner, reiterated the reasoning of the lower authorities in denying the Cenvat credit.

4. The Tribunal observed that the Lower Authority heavily relied on the Larger Bench decision in Vandana Global, which was not approved by the Hon’ble Gujarat High Court in the Mundra Ports case. Notably, in a similar issue, the Tribunal had ruled in favor of the assessee in the case of Bajaj Hindustan. Consequently, the Tribunal found no merit in the Revenue's stance and set aside the impugned order.

5. In addition to ruling in favor of the assessee on the merits of the case, the Tribunal held that the demand was barred by limitation. Without evidence of any malafide intent on the part of the assessee, the Tribunal concluded that the longer period was not available to the Revenue for raising the demand. Therefore, the Tribunal held the demand to be time-barred as well.

6. Ultimately, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant and granting consequential relief.

---