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2023 (11) TMI 162 - AT - Central ExciseDenial of CENVAT Credit - unfinished ‘mild steel (MS) pipes’ - failure to deploy any equipment for production - reversal of CENVAT Credit - credit reversed before issuance of SCN - HELD THAT:- It is found that ‘mild steel (MS) pipes’ procured by them had been cleared on payment of duty after undertaking some processing. It is now settled law that with duty having been paid, it was not open to central excise authorities to dispute credit availed on the goods procured for the purpose. It was not alleged in the notice that the appellant was at any time deficient in credit availability at any point in time during the period of dispute; to allow the plea of remand would be nothing but authorizing contemplation of proceedings beyond the period of limitation by bringing new charges against the assessee. There is, thus, no ground for sustaining the disallowance of credit of ₹ 39,73,256. For the claim of the appellant that ‘angles’, ‘beams’ and ‘channels’ were covered within definition of ‘capital goods’ in rule 2(a) of CENVAT Credit Rules, 2004, reliance was placed on the decision of the Tribunal in M/S. MANGLAM CEMENT LTD. VERSUS C.C.E., JAIPUR-I [2018 (3) TMI 1547 - CESTAT NEW DELHI] and in CC & CE, VISAKHAPATNAM VERSUS M/S. A.P.P. MILLS LIMITED [2013 (7) TMI 494 - CESTAT BANGALORE]. It is, however, on record that the appellant had not yet procured the ‘cranes’ for whose support the said goods had been purportedly deployed. The facts being, thus, at variance with the cited decisions and, the ‘capital goods’, not having been installed the claim of eligibility of goods used for installing ‘structural support’ is not tenable. CENVAT Credit Rules, 2004 offers the framework and the mechanics for neutralization of duty discharged at preceding stage of ‘value addition chain’; it is, therefore, procedural enunciation in which ‘availment’, as is ‘reversal’, is in the hands of ‘assessee’ while ‘restoration’, as is recovery, of credit is left to the jurisdictional authorities. While rule 14 of CENVAT Credit Rules, 2004 enables recourse to section 11A of Central Excise Act, 1944 as does rule 15 of CENVAT Credit Rules, 2004 enabling recourse to section 11AC of Central Excise Act, 1944, the latter cannot be drawn upon in the absence of the former - It is on record that the credit of ₹ 14,55,597 had been reversed well before issue of notice. There was, thus, no cause to initiate proceedings under rule 14 of CENVAT Credit Rules, 2004; it would appear that absurdity of ‘appropriating’ credit already reversed, and not restorable without prior approval from jurisdictional central excise authorities, does not seem have occurred to the adjudicating authority as an exercise in futility. The appeal is allowed to the extent of setting aside recovery of ₹ 39,73,256 and of the penalty in full.
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