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2016 (8) TMI 840

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..... ish the rights availed of before the amendment. Period of limitation - Held that:- I do not find any infirmity in the finding of Commissioner(Appeals) that in view of similar demand issued to the same respondent on identical issue for earlier period, which has been decided in their favour, the law of limitation will hit the issue of impugned demand. This is a correct interpretation of law and is supported by a plethora of judgments of various courts. - Decided against the Revenue - E/23147/2014 - Final Order No. A/30609/2016 - Dated:- 19-7-2016 - Mr. Madhu Mohan Damodhar, Member(Technical) Shri Nagaraj Naik, Deputy Commissioner(AR) for the appellant Shri P. Ramakrishna, Advocate for the respondent ORDER The facts of the case as put forth by the appellant department are as follows: i. The respondent/assesse are the manufacturers of HR Strips, Pipes, Towers Tower Parts falling under Chapter 72 of the First Schedule to the Central Excise Tariff Act, 1985(CETA). They were availing CENVAT Credit of duty paid on inputs /capital goods and Service Tax paid on input services in terms of the CENVAT Credit Rules, 2004(CCR). During the course of verification of ce .....

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..... and installation of machinery etc. Submitted by the assessee, on record to prove that the subject MS/HR/SS items were used/consumed for manufacture of various capital goods which in turn were used within the factory for manufacture of dutiable final products. c. The Commissioner (Appeals) further held that although, it is a fact that the subject MS/HR/SS items cannot be treated as capital goods by themselves, the fact that they were consumed in fabrication/manufacture of capital goods is evident on record; In fact, the subject MS/HR/SS items ought to have been treated as inputs, but not as capital goods. The incorrect treatment of the MS/HR items as capital goods, instead of being treated as inputs, cannot be a ground for denial of the eligible CENVAT Credit. Moreover, mere incorrect treatment of an input as capital goods also cannot be a reason to deny the credit. 3. Aggrieved by this Order, the Department is now in appeal, on the following grounds: a. From the definition of capital goods as defined under Rule 2(a) of the CENVAT Credit Rules 2004 the items do not fit in the description of Capital goods as defined in the said rule. The said goods neither fall under any of .....

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..... g foundation and for building supporting structures cannot be treated as either inputs for capital goods or as input in relation to the final products and therefore, no credit of duty paid on the same can be allowed under Cenvat Credit Rules. It was further held by the Larger Bench in the said Order 'that the term capital goods has been defined in the Cenvat Credit Rules, which in turn have been framed under the rule making powers conferred under Section 37 (2) of the Act. The said Section refers to credit of duty paid on goods used in, or in relation to the manufactures of excisable goods. Hence, 'capital goods' defined in the Cenvat Credit Rules in the context of providing credit of duty paid, have to be excisable goods. e. In the instant case, the assessee contends that they used the impugned goods in manufacture of capital goods which were in turn used in production activity. However, they failed to adduce any evidence that they declared the same in the ER -1 returns filed by them. 4. During the hearing, the on behalf of the appellant, the Id. AR Shri Nagraj Naik reiterated the grounds of appeal. He also submitted that the amendment made vide Notification .....

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..... ision of the Larger Bench of the Tribunal in Vandana Global Ltd. (supra). However, I find that appeal against the said Larger Bench decision was admitted by the Hon'ble Chhattisgarh High Court on 26/09/2011 in Tax Appeal No. 183 of 2010 filed by filed by Scania Steels and Powers Ltd. The view taken in Vandana Global case was also distinguished in a subsequent Tribunal judgement in the case of CC CE, Vishakhapatnam vs. APP Mills [2013(291) ELT 585 (Tri. Bang.)]. The relevant portion of the order is reproduced below:- 4.1 Obviously, clause (i) of Rule 2(a)(A) is pari materia with clause (3) of the table annexed to Rule 57Q. Similarly, clause (iii) of Rule 2(a)(A) is pari materia with clause (5) of the table annexed to Rule 57Q. In the case of Rajasthan Spinning Weaving Mills Ltd. (supra), the Hon ble Supreme Court considered the question whether the steel plates and channels used in the fabrication of chimney for DG set would fall within the purview of Sl. No. 5 of the table annexed to Rule 57Q. The Hon ble Supreme Court found that the DG set fell under Heading No. 85.02, Chapter 85, of First Schedule to the Central Excise Tariff Act and ipso facto got covered under Sl. No. .....

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..... the judgment of the Larger Bench, rendered in the case of Vandana Global Limited (supra), which does not hold the field because of the subsequent judgment rendered by the Supreme Court. The Tribunal, in subsequent matters, has clearly indicated that the Larger Bench judgment of the Tribunal is no longer a valid law and, therefore, this Court finds that the order impugned cannot be sustained at all. It does not appear from the impugned order whether the judgment of the Supreme Court and the subsequent judgments of the Tribunal were placed before the Tribunal or not. Furthermore, the Tribunal did not record any findings on the merit of the matter. This Court, therefore, feels that justice would be sub-served if the application, seeking waiver of the pre-condition deposit of duty, is considered afresh by the Tribunal. 8. In any case, it is a fundamental premise of jurisprudence that one does not expect rights conferred by the Statute to be destroyed by events which took place before it was passed (Birmingham State counsel Vs. Wolker [2007(3) ALL ER 445]. In Maxwell vs. Murphy (1957) 96 CLR 261, Dixon C.J. has held that: The general rule of the common law is that a statute .....

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..... 6-5-2010 restricts the scope of Rule 19 and after this amendment, the goods which are fully exempt from duty or are chargeable to nil rate of duty, cannot be exported under bond or LUT under Rule 19 and accordingly, if for manufacture of such exempted goods, any duty paid inputs have been used, the Cenvat credit of the duty paid on the inputs cannot be availed. Since this amendment adversely affects the manufacturers, the same cannot be given retrospective effect. 9. In any case, I find that the issue of eligibility of steel plates and MS plates used in fabrication has been well settled by the Hon ble Apex court in the case of Commissioner Vs. Rajasthan Spinning Weaving Mills Ltd. [2010 (255) ELT 481 (SC)]. It was also followed in India Cements Ltd. vs. CESTAT, Chennai [2015(321) ELT 209 (Mad.)], the relevant portion of which is as follows:- 12. From a perusal of the above said judgment, it is seen that there is no change in the circumstance and this Court had already considered the issue and held that the decision reported in 2011-TIOL-73-SC-CX = 2011 (270) E.L.T. 465 (S.C.) (Saraswati Sugar Mills v. Commissioner of Central Excise, Delhi - III) in Civil Appeal No. 5295 o .....

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..... argely in favour of the assessees. The Larger Bench decision examined the availability of the credit on these items when the resultant product gets permanently embedded to the earth. The Larger Bench concluded that the capital goods under the Cenvat Credit Rules for the purpose of credit have to be excisable goods. Items used for supporting structures cannot be treated as inputs for capital goods. It was held that the Division Bench decision in the case of Bhushan Steel and Strips Limited, 2008 (223) E.L.T. 517 (Tribunal), is not correct view of the law. We find in the present impugned order, the original authority denied the Cenvat credit on iron and steel items on substantial reliance on this Larger Bench Decision of the Tribunal in Vandana Global (Supra). Apparently, the Larger Bench view was arrived at after interpretation and analysis of the decision of the Division Bench. This proposition of legal principle was not available prior to that. Rather various decisions which were discussed in the Larger Bench order held different interpretation on the subject. In this factual background it will not be tenable to hold that the appellant deliberately suppressed any material fact whi .....

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