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Issues: (i) Whether cenvat credit was admissible on MS angles, MS channels, MS beams and joists as inputs used in fabrication of rolling mills; (ii) Whether the demand was barred by limitation.
Issue (i): Whether cenvat credit was admissible on MS angles, MS channels, MS beams and joists as inputs used in fabrication of rolling mills.
Analysis: The goods were held not to fall within the category of capital goods, but the entitlement to credit as inputs remained material. The record showed that the disputed items were used for fabrication and making of rolling mills, and not merely for laying foundation or providing support structure. The Chartered Engineer's certificate and the earlier favourable order on the same issue were on record, and the denial was found unsustainable because the Commissioner had not dealt with these materials properly. Applying the user test principle, the goods were treated as eligible for credit.
Conclusion: The issue was decided in favour of the assessee.
Issue (ii): Whether the demand was barred by limitation.
Analysis: The similar dispute had already been raised by the Department in an earlier notice, showing that the issue was within departmental knowledge since 2014. In those circumstances, suppression could not be alleged, and the extended period was held unavailable. The notice was beyond the normal limitation period and therefore time-barred.
Conclusion: The issue was decided in favour of the assessee.
Final Conclusion: The impugned order was held unsustainable and the demand was set aside, resulting in allowance of the appeal.
Ratio Decidendi: Cenvat credit is admissible where the disputed goods are used in fabrication or manufacture of eligible plant and machinery and the extended limitation period cannot be invoked in the absence of suppression when the same controversy was already within the Department's knowledge.
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