Appeal Upheld: Eligibility for Cenvat Credit on Pre-Manufacturing Services Confirmed; Show Cause Notice Time-Barred.

The Tribunal allowed the Appeal, affirming the Appellant's eligibility for Cenvat Credit on input services used before manufacturing commenced. It held that the Show Cause Notice issued for the period 01/03/2012 to 31/03/2015 was time-barred, as the Department was aware of the credit taken. The Appeal was allowed with consequential relief.

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Issues involved:
1. Eligibility of Cenvat Credit for input services used during setting up of factory.
2. Time bar for Show Cause Notice issued for Cenvat Credit taken during a specific period.

Eligibility of Cenvat Credit:
The Appellant, engaged in manufacturing "Non Malleable Cast Iron Articles," claimed Cenvat Credit for input services utilized during the period from 01/03/2012 to 31/03/2016, when setting up their plant for manufacturing finished products. The Department contended that post 01/04/2011, Rule 2(l) of CCR, 2004 excluded Cenvat Credit for services used in setting up factories. The Appellant argued that these services were essential for commencing manufacturing activities, citing relevant case laws supporting their eligibility for Cenvat Credit. The Tribunal, considering the case laws and factual details, allowed the Appeal on merits, emphasizing that the Appellant was entitled to the credit as the services were used before manufacturing commenced.

Time bar for Show Cause Notice:
The Show Cause Notice issued on 17/05/2017 for Cenvat Credit taken from 01/03/2012 to 31/03/2015 was challenged by the Appellant as time-barred. The Appellant contended that as they regularly filed ER-1 Returns showing the credit taken, the Department was aware of the situation and there was no suppression. The Tribunal agreed that the Department was informed of the credit taken during the mentioned period, and as there was no suppression on the Appellant's part, the demand for the extended period was also held to be hit by the time bar. Consequently, the Appeal was allowed even on the basis of limitation.

Conclusion:
The Tribunal allowed the Appeal on merits, affirming the Appellant's eligibility for Cenvat Credit on input services used before commencing manufacturing activities. Additionally, the Tribunal held that the Show Cause Notice for the mentioned period was time-barred due to the Department's awareness of the credit taken by the Appellant. The Appeal was allowed with consequential relief as per law.

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