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2019 (5) TMI 129 - AT - Central ExciseCENVAT Credit - input - input services - construction of a new project called Line-II Project (cement plant) - time limitation. CENVAT Credit - inputs - HELD THAT:- Although it is alleged in the Show Cause Notice that the goods did not fall within the definition of ‘inputs’, the reason for which the Credit has been disallowed is that after assembly and installation of such items, they become immovable property and therefore, are not eligible for Credit. From the Show Cause Notice as well as the impugned Order, it is seen that various items were used for setting up of the cement plant. Many of these items are components or small parts which go into assembly, installation or commissioning of machines and equipment. As per Explanation-2 of the definition of inputs, as it stood during the relevant period, ‘input’ includes the goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. Thus, all those items which are brought into the factory and used for the manufacture of capital goods, which are further used for the manufacturing activity, would be eligible for Credit. The Department does not have a case that the items are not used as part of the cement plant. Instead, the Credit has been disallowed observing that these items take the nature of immovable property after being fixed to earth - the disallowance of Credit on the impugned items under the category of ‘inputs’ is unjustified and requires to be set aside. CENVAT Credit - input services - HELD THAT:- The assertion of the Ld. Consultant for the appellant that there is no specific mention in the Show Cause Notice as to what are the categories of services under dispute, is not without merit. In fact, there is nothing in the Show Cause Notice which gives details of the services which are not eligible for Credit - Without availing the services of Erection, Commissioning and Installation, the machineries and equipment cannot be installed and put to commence manufacturing activity. We therefore find that the disallowance of Credit under the category of ‘input service’ to the tune of ₹ 6,64,95,149/- is without any legal reasons and requires to be set aside. Time limitation - HELD THAT:- It is seen that for the period from November 2009 to March 2011, audit and later, investigation was also conducted. In spite of such investigations, the Show Cause Notice was issued only on 27.11.2014. The appellants have disclosed the entire Credit availed by them in their ER-1 returns as well as their statutory records. It is also seen that they have intimated the Department as early as 04.11.2009 with regard to their intention to avail the Credit - the appellants cannot be saddled with the allegation of suppression of facts with intention to evade payment of duty - there are no ingredients for invoking the extended period of limitation. Appeal allowed - decided in favor of appellant.
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