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2022 (11) TMI 99 - AT - Central ExciseCENVAT Credit - Iron and Steel Materials - applicability of principles of user test - April 2008 to March 2009 - levy of penalty - extended period of limitation - HELD THAT:- In the instant case the dispute relates to the period from April, 2008 to March, 2009 whereas the Show Cause Notice is issued on dated 25.07.2012 i.e. beyond normal period of limitation of one year. Therefore, as per Section 11Aof the Central Excise Act, 1944 the entire demand is barred by normal period of limitation. Hence, extended period of limitation cannot be invoked in the instant case in as much as none of the ingredients necessary for invoking extended period under proviso to Section 11A (1) exists. Levy of penalty - HELD THAT:- In the facts and circumstances of the case there is no warrant in levying any penalty upon the Appellant. During the material period the position of law was not settled and there were divergent views expressed by the Courts / Tribunals leading to referral of the matter to Larger Bench in the case of Vandana Global Ltd., Vs. CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)]. Hon’ble Chhattisgarh High Court has set aside the decision of the Tribunal’s Larger Bench in the case of Vandana Global M/S VANDANA GLOBAL LIMITED AND OTHERS VERSUS COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT]. It is further observed that the principle of “user test” also need to be considered while deciding the entitlement of assessee to avail CENVAT Credit as laid down by the Hon’ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS LTD. [2010 (7) TMI 12 - SUPREME COURT]. Following the said decision, the Hon’ble Madras High Court in the case of Thiru Arooran Sugars [2017 (7) TMI 524 - MADRAS HIGH COURT], has held that iron and steel items and cement used for erection of foundation and support structures would also come within the ambit of the definition of “input” so long as it satisfies the “user test”. In the facts of the present case, it is not in dispute that various steel items have been used for the purpose of setting up of Sponge Iron Plant for manufacture of final products. Therefore, by applying the “user test” principle, the Appellant is entitled to avail credit on the steel items. The Appellant is entitled to avail credit - Appeal allowed - decided in favor of appellant.
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