Tribunal grants CENVAT credit pre-07.07.2009, demand post-07.07.2009, penalties waived.

The Tribunal ruled in favor of the appellant concerning the eligibility to avail CENVAT credit on M.S. items procured before 07.07.2009, based on established legal principles and precedents. However, for the period post 07.07.2009, a specific amount of Rs. 5,06,208 was confirmed as demand due to lack of substantiation. Penalties imposed were set aside considering the significant portion of demands set aside and ongoing litigation. The appeal was disposed of on 13.11.2018 by the Tribunal.

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Issues involved: Eligibility to avail CENVAT credit on M.S. items procured, contesting show cause notice on merits and limitation, applicability of "Explanation" to inputs, recent judgments favoring the assessee, justification of CENVAT credit post 07.07.2009, imposition of penalty.

Analysis:

The appeal in this case pertains to the eligibility of availing CENVAT credit on various M.S. items procured between December 2006 to July 2010. The appellant contested a show cause notice demanding around Rs. 6.50 crores along with interest and penalty. The primary contention was that the M.S. items were used for fabrication of capital goods and supporting structures before the introduction of an "Explanation" to inputs on 07.07.2009. The appellant referred to recent judgments in similar cases where the Bench ruled in favor of the assessee (appellant). The adjudicating authority, however, rejected the appellant's submissions and confirmed the demand along with interest and penalty. The issue of eligibility to avail CENVAT credit on M.S. items before 07.07.2009 was settled in favor of the appellant based on established legal principles and precedents.

Regarding the eligibility to avail CENVAT credit post 07.07.2009, an amount of Rs. 5,06,208 was under scrutiny. The appellant could not substantiate that this amount on M.S. items was indeed used for capital goods. Consequently, the confirmation of demand for this specific amount along with interest was upheld. However, considering the significant portion of demands being set aside and the ongoing litigation in various judicial forums, the imposition of penalties was deemed unwarranted. Therefore, the penalties imposed were set aside. The appeal was disposed of with the above determinations on 13.11.2018 by the Tribunal.

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