Cenvat credit on MS angles, channels, MS Plates etc

PJ/Case Laws/2010-11/1043

Case: CC & CE, Raipur v/s Hira Industries Ltd.

Citation: 2010 (102) RLTONLINE 233 (CESTAT-DEL.)

Issue:- Whether Cenvat credit is available on M.S. angle, channels, M.S. plates, joist, CTD bars and M.S. beams for construction/fabrication of civil foundation/building structure, conveyor belt, crushing plant?

Brief facts:- Respondent is a provider of business auxiliary services. They are engaged in crushing of iron ore lumps on job work basis for third parties. They have received items like M.S. angle, channels, M.S. plates, joist, CTD bars and M.S. beams and utilised the same for construction/fabrication of civil foundation/building structure, conveyor belt, crushing plant.

The Original Authority denied the credit on these items and ordered recovery of cenvat credit along with interest and imposed penalty of Rs. 50, 000/- under Rule 15 of the Cenvat Credit Rules, 2004. In appeal, the Commissioner (Appeals) held that these items could be considered as capital goods and also as inputs and allowed the appeal. It was also held that demand prior to October, 2006 was time barred.

Against the order of the Commissioner (Appeal), Revenue is in appeal before the Tribunal.

Appellant’s Contentions:- Revenue submits that the said items having been used for supporting structure in the crushing plant are not eligible for the credit, as settled by the Larger Bench of the Tribunal in the case of Vandana Global Ltd [2010 (253) ELT 440].

Respondent’s Contentions:- Assessee submits that some of the impugned items have been used for capital goods, namely, conveyor belt. Such items are definitely eligible for the credit. Even in respect of other items, there were differing rulings of the Tribunal and their belief that they were eligible for credit in respect of these structural items was a bona fide belief. As the demand relates to the period prior to 30.9.05, and the show cause notice having been issued on 16.1.2007, Assessee submits that the entire demand is time barred as rightly held by the Commissioner (Appeals).

Reasoning of the Judgment:- The Tribunal found that Commissioner (Appeals)’s order is in favour of the party both on merit and on limitation. It was held that in respect of the part of the demand, the Department has got a case in their favour in the light of the decision of the Larger Bench in the case of Vandana Global Ltd.

However, considering the facts and circumstances of the case, the finding of the Commissioner (Appeals) that the demand is time barred deserves to be upheld. In view of the above, without going into the merits of the case, the Tribunal held that the finding of the Commissioner (Appeals) that the demand is time barred is legal and proper.

Decision:- Appeal rejected. Cross objection disposed off.

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PJ/Case Laws/2010-11/1043

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