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2014 (6) TMI 622 - AT - Central ExciseDenial of CENVAT Credit - various items used and consumed for setting up such a refinery - non-filing of the declaration - HTPE sheets, insulation packages, domestic (refractory) anchors etc. though not falling under specific Chapters of 84, 85 and 90, are used in the refinery as either components or spares in the plant and machinery which are used for the manufacturing of the final products - Substantial time was taken for setting up the entire refinery - Held that:- Capital goods and other goods were received and consumed in the setting up of the unit, mere non-filing of the declaration cannot be a ground for denial of credit in the view which has been upheld by the Hon’ble High Court of Madras in the case of Kothari Sugars & Chemicals (2008 (10) TMI 627 - Madras High Court ). We also find strong force in the contentions raised by the Ld. Counsel that sustantative benefits should not be denied to an assessee only on the ground of non-fulfillment of procedural conditions. As long as, there being no dispute as to the duty paid character of the capital goods / other goods, and the receipt in and consumption thereof, there cannot be the denial of Cenvat Credit to the appellant. - Decision in the case of Jewel Brushes Pvt. Ltd. [2008 (4) TMI 644 - CESTAT, AHMEDABAD], Steelco Gujarat Ltd. [2010 (2) TMI 307 - GUJARAT HIGH COURT] and Vimal Enterprises [2005 (7) TMI 111 - HIGH COURT OF GUJARAT AT AHMEDABAD] followed - Credit allowed. As regards HTPE sheets, insulation packages, domestic (refractory) anchors etc. - Held that:- the items and the usage thereof which has been demonstrated before us, from the documents on records, clearly indicate that these items were consumed / used as components, spares or parts of the various machineries which were either fabricated and installed alongwith bought out items for setting up of the refinery. - Decision in the case of Essar Steel Ltd. [2008 (12) TMI 566 - CESTAT, AHMEDABAD] followed - Credit allowed. As regards credit in respect of consumables such as enamels, paints, polyester resins, electrodes and chemicals - Held that:- Appellant has been able to demonstrate before us and also canvassed before the adjudicating authority that these items were essential items without which factory could not be set up and needed for maintenance due to substantial time taken for setting up the entire refinery. Since it is undisputed that these items were used in the factory premises for maintaining of the plant and machinery, fabrication of machinery, not having the stock of the said items cannot be a ground for denial of the Cenvat Credit the appellant. - Credit allowed. Demand of interest on Reversal of Cenvat Credit where assessee has accepted the credit is ineligible - Held that:- It is also undisputed that they have reversed the said amount. In our view, all the arguments made by the Ld. Counsel that interest cannot be charged, would not carry the case any further, as the Apex Court in the case of Indswift Laboratories Ltd. (2011 (2) TMI 6 - Supreme Court), was specifically interpreting the provisions of Rule 14 of the Cenvat Credit Rules, 2004 and held that even if the credit is taken and subsequently reversed, interest liability arises. Respectfully following the ratio laid down, we hold that the appellant is liable to pay the interest on the amount. Decided partly in favour of assessee.
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