2015 (2) TMI 1074 - AT - Central Excise

Denial of Input credit - credit on the items namely Steel/ Mill Plates & HR Sheets, Jointing Sheets, V Belt, Centrifugal Screen as well as paints & welding electrodes on the premise that these are used in fabrication of capital goods. - Held that - Usage of these items includes staging supporting structures and factory for general maintenance, roofing purpose and used in erection of capital stock admittedly the usage of these items which have been recorded by the Ld. Commissioner (A) in the impugned order are not in nature of usage of fabrication of capital goods. Therefore, the Cenvat Credit on these items namely HR sheets PMP plate different sheet and steel plate is not admissible to the respondent. Consequently the respondent is directed to reverse the said Cenvat Credit along with interest. As the issue is of deciding whether they are admissible to the Cenvat Credit on these items was in dispute during the relevant period. - However, penalty is not imposable - Decided partly in favour of Revenue.

Summary

Issues:

1. Entitlement to Cenvat Credit on various items used in fabrication of capital goods.

Analysis:

The appeal concerns the entitlement of Cenvat Credit on items like Steel/Mill Plates & HR Sheets, Jointing Sheets, V Belt, Centrifugal Screen, and paints & welding electrodes used in the fabrication of capital goods. The Revenue contends that these items were not utilized for the fabrication of capital goods, citing the decision in Saraswati Sugar Mills case. On the contrary, the respondent argues that these items were indeed used as capital goods for parts thereof, relying on the decision in UOI Vs. Hindustan Zinc Ltd. and Raymond Ltd. Vs. C.C.E. Bhopal.

Upon considering the submissions, the Tribunal examined the impugned order by the Ld. Commissioner (A) where it was found that the items in question were used for general maintenance, roofing purposes, and erection of factory structures, rather than specifically for the fabrication of capital goods. Consequently, the Tribunal held that the Cenvat Credit on these items, including HR sheets, PMP plate, different sheets, and steel plates, was not admissible to the respondent. The respondent was directed to reverse the Cenvat Credit along with interest, as the admissibility of the credit on these items was disputed during the relevant period.

In view of the above findings, the Tribunal concluded that the penalty on the respondent was not imposable, and thus disposed of the appeal accordingly. The judgment emphasizes the distinction between the usage of items for general purposes versus their specific utilization in the fabrication of capital goods, highlighting the importance of adherence to the Cenvat Credit rules and relevant legal precedents in determining the eligibility for such credits.