JUDGMENT

Ritu Bahri, J. (Oral)

The instant appeal, under section 35G of the CENTRAL EXCISE ACT , 1944, has been filed for setting aside the final order dated 05.07.2018 (Annexure A-3) passed by the Customs, Excise & Service Tax Appellate Tribunal, Chandigarh (for short 'the Tribunal'), whereby appeal filed by the respondent has been allowed.

2. Before the Tribunal, respondent-IOL Chemicals and Pharmaceuticals Limited had filed an appeal against the order, wherein Cenvat credit on the steel items i.e. M.S. Plates, MS Sheets/Aluminium Coil, Joist/Square/joist Challen/HR Plates/Shapes & Sections/MS Channels, Angels, Welding electrodes CRSS Patti/HRSS Plates/HR Coil/Sheets etc. were denied on the ground that those items were not capital goods in terms of Rule 2(a) of CENVAT CREDIT RULES , 2004, therefore, the respondent was not entitled to avail Cenvat credit on the said items for the period 15.05.2006 to 31.03.2010.

3. The Tribunal allowed the above said appeal by referring to the judgment passed by the larger bench of the Tribunal in Vandana Global Limited v. CCE,Raipur, 2010 (253) ELT 440 (Tri.-LB), decided on 30.04.2010, wherein it was held that the Cenvat credit was not available to the appellant. However, the said decision was set aside by the Chhattisgarh High Court in 2011 (274) ELT A-78 (Chhattisgarh) and the benefit of Cenvat credit was allowed to the respondents with respect to the steel items by holding that the same were capital goods in terms of Rule 2(a) of CENVAT CREDIT RULES , 2004.

4. Learned counsel for the appellant has not been able to show any judgment, which has reversed the judgment of Chhattisgarh High Court. Rather, he has argued that the Tribunal has allowed the appeal on merits, however, the main issue before the Tribunal was, whether the revenue was correct in invoking the revisional power beyond limitation. He further argued that this aspect has not been considered and by referring to the judgment of Chhattisgarh High Court, the appeal of the respondent has been allowed. The main question before the Tribunal was, whether the show cause notice dated 03.06.2011 (Annexure A-1) was issued on availing the facility of Cenvat Credit in respect of duty paid on inputs as well as capital goods.

5. The assessee-respondent had availed the benefit of Cenvat credit from 15.05.2006 to 31.03.2010 amounting to Rs.2,49,21,545/-. The show cause notice dated 03.06.2011 (Annexure A-1) was issued by extending the period of limitation, under Section 11A of the Act, asking the respondent as to why:-

(i) The Cenvat credit amounting to Rs.2,49,21,545/- (Rs.2,24,198,102/- BED, Cess of Rs.4,83,196/-, SHE of Rs.2,40,247/-) should not be disallowed and recovered from them under Rule 14 of the Rules read with Section 11A of the Act by invoking extended period of limitations as provided under first proviso to Section 11A of the Act and the amount of Rs.5,64,467/- already paid by them should not be adjusted towards the above amount;

(ii) Interest in terms of section 11AB of Central Excise Act, 1944 should not be recovered from them at the appropriate rate;

(iii) Penal action under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of the Act should not be taken against them for contravention of aforesaid provisions."

6. The assessee submitted its reply to the show cause notice. The case was adjudicated by the Commissioner (erstwhile Central Excise Commissionerate, Chandigarh-II), who vide order dated 19.12.2011 (Annexure A-2) confirmed the demand of Rs.2,49,21,545/-. The amount of Rs.5,64,467/- already paid towards confirmed demand was adjusted. Interest under Section 11AB of the Act along with equal penalty