2023 (4) TMI 1073 - HC - Central Excise

Appeal Dismissed: Tribunal's Decision on Cenvat Credit for Steel as Capital Goods Upheld; Show Cause Notice Time-Barred.

The HC dismissed the appeal, upholding the Tribunal's decision that allowed Cenvat credit on steel items classified as 'capital goods' under Rule 2(a) of ... CENVAT Credit - capital goods - M.S. Plates - MS Sheets/Aluminium Coil - Joist/Square/joist Challen/HR Plates/Shapes & Sections/MS Channels - Angels - Welding electrodes CRSS Patti/HRSS Plates/HR Coil/Sheets etc. - period 15.05.2006 to 31.03.2010 - HELD THAT:- A consistent view has been taken that benefit of Cenvat credit is to be given in respect of the goods like angles, joists, beams, bars, plates, which go into fabrication of structures embedded to earth, which are to be treated inputs for capital goods. In the judgment of M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT], the Chhattisgarh High Court has examined the term ‘capital’ goods defined in Cenvat Credit Rules, 2004. Finally, the benefit of Cenvat Credit has been extended to the assessee for using the goods as inputs. The respondent-assessee has a right to claim Cenvat Credit in the items in question. The impugned order has been rightly passed after appreciating the facts in the right perspective and no ground is made out to interfere in the same. No substantial question of law arises in the present appeal. Appeal dismissed. Issues:The issues involved in the judgment are the denial of Cenvat credit on steel items, invocation of revisional power beyond limitation, sustainability of show cause notice, and the interpretation of the term 'capital goods' under Cenvat Credit Rules, 2004.Denial of Cenvat Credit on Steel Items:The respondent had filed an appeal against the denial of Cenvat credit on steel items by the Tribunal. The Tribunal allowed the appeal based on a judgment by the Chhattisgarh High Court, which held that the steel items were capital goods under Rule 2(a) of Cenvat Credit Rules, 2004. The appellant failed to provide any judgment reversing the decision of the Chhattisgarh High Court. The main issue was whether the show cause notice was valid regarding availing Cenvat credit on duty paid items.Invocation of Revisional Power Beyond Limitation:The appellant argued that the Tribunal allowed the appeal based on merits without considering the issue of revisional power being invoked beyond limitation. The show cause notice dated 03.06.2011 was issued to recover Cenvat credit amounting to Rs. 2,49,21,545/-, interest, and penalty. The Tribunal held the notice to be barred by limitation based on the judgment of the Chhattisgarh High Court, thus dismissing the appeal.Interpretation of 'Capital Goods' under Cenvat Credit Rules:The Chhattisgarh High Court's judgment in Vandana Global Ltd. vs. Commissioner of C. Ex. & Cus, Raipur, clarified the term 'capital goods' under Cenvat Credit Rules, 2004. The High Court considered whether goods like angles, joists, beams, etc., used in the fabrication of structures embedded to earth qualify as inputs for capital goods. The judgment emphasized that the benefit of Cenvat credit should be extended to goods used as inputs for capital goods, aligning with previous decisions by other High Courts.Conclusion:The High Court dismissed the appeal, finding no merits to interfere with the Tribunal's decision. The respondent-assessee was deemed entitled to claim Cenvat credit on the steel items in question based on the interpretation of the term 'capital goods' as per the Chhattisgarh High Court's judgment. No substantial question of law was found to arise in the appeal, leading to the dismissal of the case.