2016 (8) TMI 484

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..... tiny of ER-1 returns, it was found that respondents had availed irregular credit on steel items used for fabrication of capital goods. A show-cause notice was issued which after due process of law confirmed the demand of Rs. 31,03,362/- along with interest and imposed equal amount of penalty under Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. The respondents carried the issue in appeal and the Commissioner(Appeals) vide the order impugned herein, the Commissioner set aside the demand, both on merits as well as on the ground of limitation. Being aggrieved, the Revenue has preferred the present appeal. 3. On behalf of the Revenue, the learned AR strongly contended that the various items like .....

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..... llowed. 4. Refuting the above contentions, the learned consultant appearing on behalf of the respondent submitted that though department relies upon the report of Range Officer to contend that these materials were used for supporting structures and foundation for machinery etc; no such report of Range Officer is placed as part of records. In the letter dated 20/05/2010, the appellants have stated that the steel materials were used for construction of support structure to capital goods. They also produced photographs and invoices. The photographs would show that these steel items are used for manufacture of parts of boiler and support structure of boiler which is an essential part of the boiler. In the invoices, the description of the goods .....

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..... t of capital goods. These two circulars definitely bring out one fact i.e. boiler consists of components which are in the nature of structural support which are essential parts of the boiler. The circular dated 18/05/2012 makes it very clear that only when the impugned items are used for laying foundation or structural supports, the credit would not be admissible. 6. Though Revenue contends that the Range Officer reported that these were used for laying foundation, as correctly submitted by counsel for respondents, no such report is placed as part of the relied upon documents. In the invoices, the description of goods is shown as components and parts of boiler. The respondents submit that they entered into a contract with M/s. CVL for desi .....

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