2014 (6) TMI 616 - AT - Central Excise

Waiver of pre deposit - CENVAT Credit - manufacturing of Capital goods - use of M.S. Angles, Channels, M.S. Flats, Plates, M.S. Bar, CTD Bars, Joist, Beams, Coils Welding Electrodes, LPG Gas, Oxygen Gas, etc. for fabrication and erection of supporting structures required for mounting of machines, erection of heds etc. - Held that - appellant s plea is that these items were used for fabrication of various items of capital goods or their components and accessories. However, in support of this claim, the appellant have not produced any evidence, as neither the fabrication of the capital goods nor components or accessories have been specifically intimated by the appellant to the jurisdictional central excise officers nor the fabrication of various items of capital goods and their components and accessories was declared in the ER-I return. - Cenvat credit in respect of these items would be admissible only if there is conclusive evidence that these items had been used for fabrication of capital goods and their components, parts and accessories. But prima facie, such evidence in this case is lacking. Therefore, we are of the prima facie view that the items were not eligible for cenvat credit either as inputs or as capital goods. - this is not case for total waiver - stay granted partly.

Summary

Issues:
1. Eligibility of cenvat credit on structural steel items used in manufacturing.
2. Time limitation for recovery of allegedly wrongly taken cenvat credit.
3. Disclosure of information regarding the use of disputed items to the department.

Analysis:
1. The appellant, a manufacturer of sponge iron chargeable to central excise duty, availed cenvat credit on structural steel items used in manufacturing. The department alleged that these items were used in fabrication and erection of supporting structures, making them ineligible for cenvat credit. The Commissioner confirmed the demand and imposed a penalty. The appellant argued that the disputed items were used for making components of various capital goods, but failed to provide conclusive evidence to support this claim. The Tribunal held that the items were not eligible for cenvat credit as inputs or capital goods due to lack of evidence.

2. The appellant contended that the show cause notice for recovery of cenvat credit was time-barred, citing conflicting judgments on the eligibility of structural steel items. They argued that the extended period for recovery should not apply due to genuine doubts regarding excisability. The Tribunal noted that the question of limitation required further examination at the final hearing, implying that evidence of disclosure to the department was crucial.

3. The issue of disclosure of information regarding the use of disputed items was raised by the department. They argued that the appellant failed to inform the department about the fabrication of capital goods using the disputed items, leading to the invocation of the extended period for recovery. The Tribunal emphasized the importance of disclosing such information to establish eligibility for cenvat credit. Lack of disclosure was considered a suppression of relevant information.

In conclusion, the Tribunal directed the appellant to deposit a specified amount within a set period, with the requirement of pre-deposit waived upon compliance. The recovery of the remaining amount was stayed pending the appeal's disposal. The decision highlighted the necessity of providing concrete evidence and disclosing relevant information to support claims for cenvat credit eligibility.