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2016 (9) TMI 284 - CESTAT HYDERABAD

2016 (9) TMI 284 - CESTAT HYDERABAD - 2016 (339) E.L.T. 127 (Tri. - Hyd.) - Cenvat credit - irregular availment of cenvat credit - Mono Block Concrete sleepers(MBC) under the category of capital goods - used for laying railway line which is used for transportation of input materials inside the factory and to carry finished cement outside the factory - connection in or in relation to the process of manufacture of finished goods i.e. cement. - Held that:- the use as explained by the appellant .....

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sleepers. - Period of limitation - disputed period is 1/2008 to 4/2009 and the show cause notice is dated 15-11-2011 - disclosure of availment in ER-1 returns - Held that:- there is no case for revenue that the appellant has not disclosed the credit details in their accounts or in ER-1 returns. They believed that credit is admissible and maintained proper statutory records reflecting the details of credit. On such score, it cannot be alleged that the appellant has willfully suppressed facts .....

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the Appellant Shri V.K. Shastri, AR for the Respondent ORDER [Order per: Sulekha Beevi, C.S.] 1. The appellants are aggrieved by the disallowance of CENVAT credit. 2. The appellants are engaged in the manufacture of cement and are registered with Central Excise department. They are availing CENVAT credit facility on inputs, capital goods and input services. A show cause notice dated 15-11-2011 was issued to appellants alleging that during the period April, 2007 to April, 2010 appellants had irr .....

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transportation of input materials inside the factory and to carry finished cement outside the factory. The appellants had disclosed the fact of availing credit in their ER-1 returns. After due process of law, the original authority confirmed the demand, interest and imposed equal amount of penalty. The original authority observed that MBC sleepers are used for railway line and is therefore in the nature of laying foundation and not eligible for credit. The alternative submission of the appellant .....

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admissible on rail sleepers is no longer res integra. The Hon ble Apex court in the case of Jayaswal Neco Ltd Vs CCE reported in 2015(319) ELT 247(SC) has categorically held that Cenvat credit on railway track which are used as handling system for raw material is admissible as these are essential and integrally connected to the process of manufacture of final product. Similar view was taken by CESTAT, Kolkata in the case of Tata Steel Ltd Vs CCE in Final Order No.FO/A/75016-75022/2016, dated 05 .....

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etc. In normal circumstances, the SCN has to be issued within one year from the relevant date. That the appellant has disclosed all the details of availment of credit in ER-1 returns as per statutory requirement. As there is no suppression, the extended period is not invokable. He pleaded that the appeal may be allowed. 5. Against this, the learned AR Shri V.K. Shastri vehemently argued that the appellants have suppressed facts and so the show cause notice issued beyond the normal period is cor .....

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e of credit is legal and proper. 6. I have considered the submissions made by either side. The issue is whether credit is admissible on MBC sleepers. The allegation in the show cause notice is that these are used for foundation and therefore credit is not admissible. The appellants have put forward a consistent plea regarding the use of MBC sleepers within the factory. It is used for transportation of raw material and finished product. The use as explained by the learned counsel makes it clear t .....

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