TaxTMI 
TaxTMI 
2016 (4) TMI 1191
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....Another letter dated 21-9-2010 was issued asking the appellant to furnish details of credit availed on these items for the period 2005-2006 to 2009-2010 The appellant replied by explaining that the credit has been rightly availed and also furnished details called for. The appellant reversed an amount of Rs. 7,90,355/- under protest being the credit availed on prefabricated items from 1-7-2009 and credit availed on MS items from 7-7-2009. The appellant contended that the demand can be made only for a period of one year from 1-4-2010 as the show-cause notice was served only on 25-4-2011. The show-cause notice alleged irregular availment of credit on MS Angles, MS channels, prefabricated modular walls, panels etc., to the tune of Rs. 41,39,628/. After due process of law, the original authority confirmed the demand of Rs. 41,39,628/- along with interest and imposed equal amount of penalty. The amount of Rs. 7,90,355/- reversed under protest was ordered to be appropriated against the demand confirmed. The appellant filed appeal challenging this order before the Commissioner (Appeals). The Commissioner (Appeals) vide the order impugned herein, allowed credit of Rs. 35,302/- availed on st....
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....apital goods, the appellants could avail only 50% credit in the year of receipt and 50% in the subsequent year. This caused delay in availing eligible credit. If the proper officer had scrutinized the returns and pointed out this, the delay in availing credit could have been avoided. That credit would be admissible if not as capital goods, as inputs. The learned counsel submitted that credit was availed on the bona fide belief that credit is admissible and that there was no intention to evade payment of duty. 4. With regard to the ground of limitation, the learned counsel pointed out that the appellants had filed ER-1 returns regularly in which the credit availed was clearly disclosed. Further in the statement filed under Rule 7 of Cenvat Credit Rules, 2004 the appellant had disclosed the details of the credit availed. The show cause notice itself is based on ER-1 returns and details furnished by appellants. That therefore, the allegation of suppression is without any basis. He pleaded that there was no wilful suppression of facts or misstatement on the part of appellant and therefore the extended period is not invocable. 5. Refuting these arguments the learned AR S....
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....0 (Tri.-LB) concluded that in order to avail credit, the capital goods should be excisable goods and when permanently embedded to earth, credit is not admissible. Prior to this judgment, the issue was subject matter of dispute at various levels. In Bhushan Steel & Strips Ltd. [2008 (223) E.L.T. 517 (Tri.)], the credit was held to be admissible. In the present case the period involved is April, 2006 to June, 2010. The authorities below have invoked the extended period and denied credit relying on the judgment laid in Vandana Global Ltd. case (supra). Therefore, the contention of appellants that they entertained a bona fide belief that credit is admissible during the period on subject items is not without force. Further, Revenue has not adduced any evidence to establish that there was suppression of facts with intent to evade payment of duty. 8. In Mundra Ports & SEZ v. CCE & Cus. [2015-TIOL-1288-HC-AHM-ST = 2015 (39) S.T.R. 726 (Guj.)], the Hon'ble High Court observed that the Larger Bench of the Tribunal in the case of Vandana Global Ltd. (supra) has not clarified as to what is the aid resorted to by the Tribunal to conclude that the amendment to Rule 2(k) is retrospective ....
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....after examining the instructions issued by the Board from time to time, that returns filed by the assessee are required to be subject to detailed scrutiny in course of which the concerned officer can call for documents from the assessee wherever necessary for the scrutiny. In the present case, we find that the starting of the enquiry was stated to be scrutiny of ER-1 Returns. This was done apparently after two years. Invoking extended period for demand is not tenable in such a situation. 9. In the present case the show cause notice itself is based upon the ER-1 returns and details furnished by appellant and not on any private records or other sources. In such circumstances, revenue cannot allege that appellant is guilty of suppression of facts. Once the assessee files returns, it is for the proper officer to subject the returns to scrutiny and call for clarifications in case of any doubt. The assessee can then be asked to reverse the credit .If the assessee disputes the direction a show cause notice has to be issued within a period of one year. Instead, in the case on hand, the department has issued the show cause notice beyond the period of one year alleging suppression an....
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....ents. Following the judgments laid in Ultra Tech Cement Ltd. case and Uniworth Textiles Ltd. case, I hold that the demand beyond the normal period is barred by limitation and not sustainable. 11. The next question to be addressed is whether the demand during the normal period is sustainable or not. The appellants have availed credit on MS items and prefabricated walls & panels as capital goods. As per the definition of capital goods these items do not fall under the category of capital goods. In the reply to show cause notice appellants have stated that the MS Angles, Channels, Beams were used for fabrication of columns for carrying the pipelines. During the material time by virtue of Explanation 2 contained in the definition of inputs, the goods required for manufacture of capital goods which are further used in the factory are eligible for credit if not used for construction of factory shed, building, or laying foundation or making structures for support of capital goods. The MS items were used for making column for carrying the pipes. Without such columns the pipes cannot hold at proper height and will not be able to bear the weight of the contents carried in these pipes....