2010 (7) TMI 852 - AT - Central Excise

Summary

Issues Involved:
1. Unlawful availment and utilization of Cenvat credit.
2. Entitlement to Cenvat credit on materials used for repairs and maintenance.
3. Binding nature of previous decisions on the Department.
4. Allegations of the impugned order going beyond the show cause notice.

Detailed Analysis:

1. Unlawful Availment and Utilization of Cenvat Credit:
The appellants, engaged in manufacturing cement and clinker, availed Cenvat credit on inputs, capital goods, and input services. The Department, upon scrutiny, noticed unlawful availment and utilization of Cenvat credit, leading to show cause notices and a confirmed demand of Rs. 95,18,199/- by the Commissioner. The impugned order was based on the observation that the steel items used by the appellants were for the erection and commissioning of immovable property, thus not qualifying as inputs under the Central Excise Act, 1944.

2. Entitlement to Cenvat Credit on Materials Used for Repairs and Maintenance:
The appellants argued that materials used for repairs and maintenance of machinery should be eligible for Cenvat credit, citing previous favorable decisions by the Commissioner (Appeals) and various judicial precedents. However, the Department contended that the matter was covered by the Larger Bench decision in Vandana Global Ltd., which held that goods used for laying foundations and supporting structures embedded in the earth are not eligible for Cenvat credit. The Tribunal noted that the Karnataka High Court's decision in M/s. Alfred Herbert (I) Ltd. did not address whether such credits could be availed for machinery embedded in the earth.

3. Binding Nature of Previous Decisions on the Department:
The appellants relied on past decisions in their favor, arguing that the Department, having accepted those decisions, could not take a different stance. The Tribunal acknowledged that while decisions of the Tribunal are binding unless challenged, this principle does not necessarily extend to decisions of the Commissioner or Commissioner (Appeals). Furthermore, the Tribunal held that new facts or legal provisions could justify a different view by the Department.

4. Allegations of the Impugned Order Going Beyond the Show Cause Notice:
The appellants contended that the impugned order exceeded the scope of the show cause notice. The Tribunal found no prima facie evidence of such transgression, indicating that this issue would need to be examined in detail during the final hearing.

Conclusion:
The Tribunal did not find a case for total waiver of the demanded amount. Considering the facts and circumstances, the appellants were directed to deposit 60% of the duty demanded within ten weeks, with compliance to be reported on 1-11-2010.