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2022 (2) TMI 791 - CESTAT CHENNAICENVAT Credit - capital goods or not - MS Angles, MS Channels, etc. - appellant contended that the impugned goods in the nature of MS Angles, MS Channels etc. have not been used for civil work and these have been used for fabrication of capital goods, their parts, components and accessories - Rule 2(a) of CENVAT Credit Rules, 2004 - suppression of facts or not - extended period of limitation - HELD THAT:- In the case of [2015 (4) TMI 569 - SUPREME COURT], similar issue came up for consideration as to the eligibility of credit on railway track materials used for handling raw materials, where it was held that the appellant has rightfully claimed for MODVAT credit in respect of this item which credit is wrongly reversed by the authorities below. The Hon'ble jurisdictional High Court in the case of Thiru Arooran Sugars [2017 (7) TMI 524 - MADRAS HIGH COURT] analysed the issue whether the MS structural steel used to support plant and machinery would be eligible for credit. It was observed that without such support structure, the machinery cannot be kept in position to be used in the manufacturing activity and it was held that whether the "user test" is applied, or the test that they are the integral part of the capital goods is applied, the Assessees, in these cases, should get the benefit of Cenvat Credit, as they fall within the scope and ambit of both Rule 2(a)(A) and 2k of the 2004 Rules. An amendment was introduced in the definition of capital goods with effect from 7.7.2009 which restricted the availment of credit of MS Angles, MS Channels etc. used for support structures of capital goods and for laying foundation. The Larger Bench of the Tribunal in the case of VANDANA GLOBAL LTD. VERSUS CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] held that the said amendment has retrospective application. The adjudicating authority has heavily relied upon the said decision to give retrospective application to the amendment. The period involved in the present appeal is from April 2005 to December 2006. The amendment of the definition of capital goods was introduced only with effect from 7.7.2009. There was nothing in the amendment which suggested that it applies retrospectively - The Larger Bench (Vandana Global case) took the view that the same applies retrospectively. The said decision was held to be not good law by the Hon'ble High Court of Gujarat in the case of Mundra Port & SEZ [2015 (5) TMI 663 - GUJARAT HIGH COURT] - the disallowance of credit on the impugned goods cannot sustain and requires to be set aside. Extended period of limitation - suppression of facts and misrepresentation or not - HELD THAT:- The department has not produced any evidence to establish that there was willful suppression of facts with intention to evade payment of duty. In fact, the appellant has availed the credit and declared the same in their ER-1 returns. Further, they have taken steps to get a report by a Chartered Engineer as to the details of the quantity of impugned goods used for fabrication of capital goods, parts, accessories and also the quantity of structural steel used for civil work. The Range Officer who conducted physical inspection and verification of the invoices and job work of the contractor has not been able to point out any infirmities on these details furnished by the appellant - the invocation of extended period alleging suppression of facts and misrepresentation cannot sustain. The appeal succeeds on the ground of limitation as well. Appeal allowed - decided in favor of appellant.
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