2018 (6) TMI 1411

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....ound that they had taken huge amount of modvat CENVAT credit but had not paid any duty at all. On verification, it emerged that during the period they were doing job work for M/s Aggarwal Foundries Pvt. Ltd., and clearing their products without payment of duty under Notification No. 214/86-CE dated 25.03.1986. A show cause notice was issued by the Additional Commissioner proposing recovery of irregular CENVAT credit to the tune of Rs. 42,23,037/- and irregular input service credit of Rs. 46,50,262/-, on ineligible input services. The show cause notice was adjudicated vide Order-in-Original No. 51/2012 (C.Ex) dated 31.12.2012 by the Additional Commissioner ordering recovery of the CENVAT credit with interest and imposing a penalty equivalent....

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....rvices As far as (a) above is concerned, CESTAT-Hyderabad has vide Final Order No. A/31141/2016 dated 03.11.2016 held that the appellant was eligible for CENVAT credit on the impugned items. In respect of the same assessee observing as follows: 6. The issue whether the subject items are eligible for credit, when used for the fabrication of parts/component/accessories of capital goods has been settled by the decisions relied by the appellant and stated supra. The Hon'ble Aoex Court in the Rajasthan Spinning & Weaving Mills Ltd., case has laid down the user test. The appellants have been able to establish that without fabrication of such parts, accessories, components of capital goods it is not able to carry out the process of manufactu....

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....ve been used in construction of the structures being not in the nature of machinery/equipment the credit on the same cannot be permissible. The assesses have also availed credit on Woven wire mesh and failed to prove the same qualifies as input or capital goods. The credit would have been held eligible on this item provided if it is proved that the same has been used as component or accessory to the any of the capital goods. In the instant case no such evidence is adduced. She argued that there is no case to give credit of this amount as these items in question are not covered by Rule 2(a) of CENVAT Credit Rules, 2004. 7. As far as (c) above is concerned, the Learned Counsel for the appellant submits that the total input service tax c....

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.... is concerned this is the second instalment of 50% of the capital goods credit of the amount already allowed by this Bench vide Final Order No. A/31141/2016 dated 03.11.2016. I find no reason to deviate from this decision and I find the credit is allowable. As far as the amount of Rs. 1,05,056/- on MS items is concerned, I find the Learned Commissioner had, in her order, observed that MS Angles, MS Channels, MS HRC Plates, Electrodes, Woven wire mesh have been used for construction of the structures being not in the nature of machinery equipment the credit cannot be allowed. She also observed that the Woven wire mesh is also no eligible for CENVAT credit as the assessee have proven that it is a component or accessory to the any of the capit....