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2016 (3) TMI 618 - CESTAT NEW DELHI

2016 (3) TMI 618 - CESTAT NEW DELHI - TMI - Cenvat credit disallowed - credit ordered to be recovered along with interest; mandatory equal penalty was also imposed - Held that:- It is not in dispute that the respondent had been submitting its monthly returns clearly showing availment of the impugned credit. Thus it is incorrect to say that it did not disclose the fact of availment of Cenvat credit on the impugned goods. These returns do not require listing of the goods on which the credit has be .....

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the appeal by way of remand to the primary adjudicating authority for de novo adjudication with the following direction/observations -(i) Cenvat credit is not admissible in respect of the impugned goods, (ii) Extended period of 5 years and mandatory equal penalty are not attracted. and (iii) The de novo adjudication should therefore be confined to only normal period of one year. - Appeal No. E/55704/2014-EX. (SM) - Final Order No.50986/2016 - Dated:- 26-2-2016 - MR. R.K. SINGH, MEMBER (TECHNICA .....

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ng authority held that the impugned goods were neither input nor capital goods and therefore the respondent had deliberately taken credit by indulging in wilful misstatement or suppression of facts. The Commissioner (Appeals) on the other hand held that the impugned goods were eligible to be called inputs and allowed the credit. 2. Revenue in its appeal and during the hearing contended as under : (i) These goods do not fall within the scope of definition of capital goods/inputs. (ii) There was n .....

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1.3.2011 and even thereunder such credit would not be allowed. Ld. DR cited the judgements of Allahabad High Court in the case of CCE, Ghaziabad Vs. Rathi Steel & Power Ltd. - 2015 (321) ELT 200 (All.) and Bombay High Court in the case of Tigrania Metal & Steel Industries P. Ltd. Vs. CCE - 2015 (326) ELT 650 (Bom.) 3. Ld. Advocate for the respondent stated that in the light of the fact that; {A}(i) The manufacture of the respondent s product required the very clean and controlled environ .....

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no suppression/wilful mis-statement of facts and as a matter of fact the CBEC clarification dated 29.4.2011 treated even furniture and stationery used in an office within the factory as goods used in the factory and as used in relation to the manufacturing business and that this clarification would be germane to explain the scope of the words in relation to manufacture for the period prior to 1.3.2011 also. {B}The respondent also filed periodical returns showing the impugned credit. {C}There was .....

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of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production; (ii) all goods, except light diesel oil, high spee .....

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ermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods; Period w.e.f. 7.7.2009; Notification No. 16/2009-CE(NT) dated 7.7.2009 amended Rule 2(k) as under: In the CENVAT Credit Rules, 204 (hereinafter referred to as the said rules) in rule 2 in clause (k), in explanation 2 after the words factory of the manufacturer , the following shall be inserted namely:- but shall not incl .....

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ich is included in the value of the final product and goods used for providing free warranty for final products; or (iii)all goods used for generation of electricity or steam for captive use; or (iv) all goods used for providing any output service; but excludes- (A) light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol; (B) any goods used for- (a). construction of a building or a civil structure or a part thereof; or (b). laying of foundation or making of structures f .....

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al use or consumption of any employee; and (F) any goods which have no relationship whatsoever with the manufacture of a final product. Explanation -For the purpose of this clause, free warrant means a warranty provided by the manufacturer, the value of which is included in the price of the final product and is not charged separately from the customer. The respondent has admitted that panels and doors were used to make cabins where medicines were manufactured. The penals were fixed from ground t .....

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nd that in the show cause notice the only paragraph devoted to the alleged suppression of facts / wilful misstatement is para 5 which is reproduced below : 5. Further the Noticee has no point of time disclosed the matter of availment of cenvat credit on pre-fabricated building items, Doors & Office furniture falling under chapter heading No. 9406, 7308 & 9403 to the department and thus appears to have wilfully suppressed the fact with an intention to avail Cenvat credit wrongly. Thus, th .....

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, 2004 read with Section 11AC of the Central Excise Act, 1944. It is not in dispute that the respondent had been submitting its monthly returns clearly showing availment of the impugned credit. Thus it is incorrect to say that it did not disclose the fact of availment of Cenvat credit on the impugned goods. These returns do not require listing of the goods on which the credit has been taken and therefore the respondent cannot be held guilty of suppression on the ground that it had not listed the .....

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