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2013 (12) TMI 1502 - AT - Central Excise
Issues involved: Eligibility for Cenvat credit in respect of various items including steam jointing sheets, champion CAF, style asbestos rope, HR/SS plate, SS drain traps, SS hose assy, swivel flange, SS flexible hose, SS sleeve holding, MS box with cover plate, garment stand, SS rack, glass material/spherical vessel, and MS sheets.
Summary: The dispute in this case revolves around the eligibility for Cenvat credit concerning multiple items. The Commissioner (Appeals) upheld the denial of Cenvat credit amounting to Rs. 2,08,231 on the basis that the items in question do not meet the definition of capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004, as they do not align with the specified Chapter Headings. Two appeals have been filed against this decision. Upon hearing both sides, the appellant's counsel argued that the impugned order failed to consider the actual uses of the items. It was contended that the items either served as component parts of capital goods, were used in the construction of tanks covered by the definition of capital goods, or were utilized for the repair of capital goods. Reference was made to a Tribunal judgment in support of this argument. On the other hand, the Jt. CDR argued that none of the disputed items qualified as capital goods and supported the Commissioner (Appeals)' decision to deny Cenvat credit. Upon review, it was observed that the disputed items were used in conjunction with boilers, reactors, tanks, or for repair purposes. Items used for repair and maintenance, as well as those preventing steam leakage, were deemed eligible for Cenvat credit based on precedents from the Hon'ble Chhattisgarh High Court and the Hon'ble Karnataka High Court. Steel items used for fabrication of movable storage tanks were also considered eligible. The impugned order was set aside as it failed to delve into the specific uses of each item, leading to a remand for fresh adjudication by the original authority. This decision was dictated and pronounced in an open court setting.
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