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2015 (12) TMI 9 - CESTAT MUMBAI

2015 (12) TMI 9 - CESTAT MUMBAI - TMI - Denial of CENVAT Credit - Capital goods - Invocation of extended period of limitation - Held that:- view taken by Commissioner (Appeals) in holding that extended period of limitation is invocable appears to be erroneous. I find that the appellant have duly informed the Revenue authorities at the time of fabrication and/or taking of credit by way of letter as well as by way of Annexure to its returns and as such there is no case of suppression of facts or a .....

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assessee is a manufacturer of fertilizers and chemicals. In the year 200506 they set up a new plant for the manufacture of Iso Propyl Alcohol (IPA). They fabricated and erected 4 mounded storage bullet (storage tank) for storage of raw material and by-product. The appellant availed CENVAT credit of input items like steel plates used for fabrication of storage tank. They took credit on angles, channels, coils used for fabrication of tanks to store water. They also took CENVAT credit on foundation .....

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n of capital goods in the IPA Plant. It was also informed that the appellant is also taking credit of duty paid on capital goods, spares, components and accessories used in the IPA Plant/factory. Again by letter dated 20/3/06 the appellant further informed the concerned Supt. that the plot on which the new plant is being erected is already transferred in the name of the appellant by MIDC, since December, 2002. It was further informed that the appellant is taking CENVAT credit on capital goods, s .....

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periodical returns. A copy of the return for the month of May, 2005 has been filed as part of the paper book which contains the details of the goods cleared in the prescribed columns. The appellant also annexed details of CENVAT credit taken on capital goods in May, 2005 and it is evident from the sheets enclosed to the return that the appellant had mentioned part serial number, document number, Excise invoice date, name of supplier, date on which the inputs were received, CENVAT credit availed, .....

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2 that the appellant have taken CENVAT credit of 50% in the financial year 200506 and the remaining 50% in the next financial year 200607 as capital goods. For invoking the extended period of limitation it been observed in para-9 of show-cause notice as follows: - 9. Under the provisions of Rule 9(6) of the CENVAT Credit Rules, 2004, onus lies on the assessee to ensure that they take only the admissible credits. While availing the CENVAT Credit on the aforesaid goods, the assessee never disclos .....

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ail inadmissible CENVAT Credit and utilise the same subsequently, for payment of duty on the clearance of their final products. From the terms and condition recorded in the Purchase Order No. placed on Fabtech Engineers, it is clear that the Fabtech Engineers were to source the entire material and provide all required services including the aforesaid Steel Plates to fabricate the mounded storage bullets at the site of the assessee and Fabtech Engineers were to receive the agreed amount as consid .....

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w-Cause Notice Therefore, above mentioned CENVAT Credit wrongly taken is required to be recovered along with interest by invoking the extended period of limitation as envisaged in proviso to Section 11A (5) (erstwhile 11A (1) and 11AA (erstwhile Section 11AB) of the Central Excise Act, 1944 read with Rule 14 of the CENVAT Credits Rules, 2004. 3. Heard the parties. 4. The adjudicating authority adjudicated the show-cause notice and dropped the show-cause notice holding that the assessee is eligib .....

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ned in the show-cause notice would not sustain both on merits as well as on limitation. 4.1 Being aggrieved the Revenue preferred appeal before the Commissioner (Appeals) on the grounds among others that the steel plates are not capital goods as specified in Rule 2 (a) of CENVAT Credit Rules, 2004, foundation and supporting structures and capital assets are not capital goods, credit is not admissible if the use of inputs is in construction of immovable items which are not capable of being bought .....

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he question of limitation in para 12 and 13 of the impugned order, without disputing the facts on record held that the extended period of imitation is applicable in facts of the case. 12. The fact of the availment of CENVAT credit on ineligible goods like steel plates, channels, angles foundation bolt, Aluminium coils etc., came to the knowledge of the department only after the audit was conducted. The respondents have relied upon the letters dated 12.07.05 & 20.03.06 as evidence that they h .....

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lled capital goods but have availed the same as credit of capital goods. Thus by informing the taking of 50% of CENVAT credit on capital goods, the respondent have only informed the availment of credit of capital goods procured for manufacture of their final product. They have thus misguided the department & now claim the same to be inputs. Hon ble Tribunal in the case of M/s Globe Iron Foundry V/s Commissioner of Central Excise, Kolkata II (2012 (277) ELT 267 (Tri - Kol) held that Appellant .....

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n the case of Nitin Patki - 2011 (273) ELT 104 (Tri - Mum) held that Suppression due to Ignorance of law or bona fide belief cannot be excused With self-removal assessment procedure, assessee has higher responsibility to comply with all requirements, and department is not expected to find about in all cases Section 11A of Central Excise Act, 1944. The Supreme Court in the case of Shri Vivekanand Mills Ltd. reported in 1999 (109) ELT 32 (SC) held that, the burden is on appellants (party) to affi .....

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riod of limitation of six months cannot be said to be applicable. It has been held in the case of Bayer India Ltd. v/s Commissioner of Central Excise, Mumbai-III - 2001 (130) ELT 97 (Tri - Mumbai) that if in the classification list a wrong benefit is taken and the fact of benefit having been wrongly taken is known only to assessee, the fact that RT 12 have been finalised would not come to the rescue of the assessee Extended period invocable. In the case of Quality Exports & Chemicals V/s Com .....

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on not eligible for Modvat credit Extended period invocable, appellant having clearly violated provisions of law in not filing the classification lists. The respondents being a well-established, large scale and have been operating with the Central Excise authorities for several years, it is least expected from them that they would be circumventing the law. 5. The learned A.R. have relied on CBEC order No. 58/1/2002CX dated 15012002 wherein it is provided in para-5 (IPA Plant) huge tanks made of .....

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ein with respect to availability of CENVAT credit on inputs used in manufacture of capital goods it is provided that the credit on inputs used in manufacture of capital goods which are further used in the factory of the manufacturer is also available, except for items like cement, angles, channels, CTD or TMT bars and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods. Further credit shall also not be admissibl .....

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