TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Coils, plates and welding electrodes used to fabricate machine supports held inputs u/r 2(k); Cenvat credit allowed, limitation denied</h1> Whether inputs used for fabricating machine supports qualify as inputs for Cenvat credit: Held that coils, plates, channels, angles and welding electrodes ... CENVAT Credit - inputs used for providing supporting structures of the machines - C.R. Coils, H.R. Coils, M.S. Plates, Channels, Angles and Welding Electrodes etc. - extended period of limitation - HELD THAT:- The impugned order has disallowed Cenvat Credit of Rs. 31,98,319/- availed by the appellant on the items such as C.R. Coils, H.R. Coils, M.S. Plates, Channels, Angles, etc. In this context, it is pertinent to observe that the decision of the Larger Bench in the case of Vandana Global Limited has been nullified. The said issue is no longer res integra as the decision of the Larger Bench in the case of Vandana Global Limited has been set aside by the Hon’ble Chattishgarh High Court in VANDANA GLOBAL LIMITED AND OTHERS [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT] - In the present case, it is found that the said items had not been used by the appellant for building supporting structures of capital goods. As the said items were used for fabricating support of machineries, the appellant are eligible for the Cenvat credit availed on the said items as ‘inputs’, as defined under rule 2(k) of the Cenvat Credit Rules. Further, as pointed out by the appellant, even vide Circular dated 18.05.2012, Cenvat credit availed on the inputs used for providing supporting structures of the machines were allowed. The appellant is eligible for the cenvat credit availed on the items such as C.R. Coils, H.R. Coils, M.S. Plates, Channels, Angles. Accordingly, the Cenvat Credit in the impugned order disallowed on this issue. Extended period of limitation - HELD THAT:- The period of dispute in this case is 2003-04 to 2005-06 (till September 2005) - It is found that the appellant had disclosed the taking of credit in their RG-23A Part-I & RG23A Part-II indicating the invoice number, description of the inputs, quantity etc. and the same are statutory documents. The appellants had also submitted ER-1 Returns from time to time. Hence, question of suppression of fact with intent to evade tax cannot be alleged in this case. Accordingly, the extended period of limitation cannot be invoked in this case to disallow the credit. Thus, the disallowance of credit pertaining to the extended period is liable to be set aside on the ground of limitation also. The appeal filed by the appellant is allowed on merits and on account of time bar. Issues: (i) Whether Cenvat credit availed on items such as C.R. coils, H.R. coils, M.S. plates, channels, angles and welding electrodes used in fabrication of machinery/support of machineries is eligible as inputs under Rule 2(k) of the Cenvat Credit Rules; (ii) Whether the demand for disallowance for the period 2003-04 to 2005-06 (extended period) is barred by limitation.Issue (i): Whether the Cenvat credit on the specified metal items is allowable as inputs when used in fabrication of capital goods/machinery within the factory premises.Analysis: The items in question were found to have been used in fabrication of parts, machinery and supporting structures for capital goods within factory premises. The Larger Bench decision relied upon by Revenue (Vandana Global) has been set aside by a High Court, and subsequent authority and administrative guidance permit credit where such items are inputs used in fabrication of capital goods. The factual record includes certification regarding use of the items in fabrication of machinery and supporting structures; comparable tribunal and high court decisions support eligibility where items are used in manufacture of capital goods.Conclusion: In favour of Assessee.Issue (ii): Whether the demand for the extended period is legally sustainable or is time-barred.Analysis: The credit taken was disclosed in statutory records (RG-23A Part I & II and ER-1 returns) and used within factory premises, supporting a bonafide belief in eligibility. Revenue has not shown willful suppression or intent to evade tax to justify invocation of the extended period.Conclusion: In favour of Assessee.Final Conclusion: The impugned disallowance for the challenged items is set aside on merits and the confirmed demand for the extended period is set aside on account of limitation; consequential relief, if any, is permitted as per law.Ratio Decidendi: Inputs comprising metal items used in the fabrication of capital goods or parts of machinery within factory premises qualify as eligible inputs under Rule 2(k) of the Cenvat Credit Rules, and disclosure in statutory returns without evidence of suppression precludes invocation of the extended period.
TaxTMI 
TaxTMI 
